New home construction is set to rise this year as more investors turn to house and land packages.

Research from Oxford Economics Australia predicts total dwelling commencements will grow by 4.5% in FY2025, with a further 4.3% increase the following year.

Timothy Hibbert, Head of Property and Building Forecasting at Oxford Economics Australia, says investors are now playing a bigger role in the house and land market, shifting away from off-the-plan apartments due to fewer new unit developments.

“In the past, first-home buyers made up a much larger share of house and land purchases, but their numbers have dropped significantly,” he says.

Investor activity is surging, particularly in Victoria and NSW, where the number of loans taken out by investors for new home construction in December 2024 was up 76% and 71%, respectively, compared to five years earlier.

This trend is also becoming more evident across other states, as investors focus on securing new-build opportunities in Australia’s housing market.