Developers warn of a 36% land sales slump as first home buyer inquiry drops 50%

One of Australia's largest residential land developers has issued a blunt warning this week: new land sales are on track to fall by roughly 36% over the coming year, and first home buyer inquiry has dropped by around 50% since the federal budget's negative gearing and capital gains tax changes were announced. If you are planning to buy a first home, especially a new build, this shift in developer confidence is worth understanding.

What developers are actually saying

Nigel Satterley, whose company is one of the country's largest private residential land developers, forecast combined lot sales across the industry falling to around 32,000 for the coming year, well short of the roughly 50,000 lots a normally functioning market would expect. He pointed to buyer caution following May's budget, which restricted negative gearing and changed the capital gains tax discount on established homes bought after budget night, while leaving new builds exempt.

Listed developers Stockland and Mirvac have also flagged a moderation in sales and inquiry levels in their most recent results, even though both companies expect the policy changes to eventually support demand for newly built homes, since new builds keep their full tax concessions under the reform.

Why a slowdown in new land sales matters for first home buyers

• Less new-build stock down the track: fewer land lots selling today generally means fewer new homes released to the market in one to two years, which can tighten supply just as buyer demand recovers.
• Schemes that favour new builds: the Help to Buy scheme and some state grants offer larger contributions or concessions on new homes, so a slower pipeline of new-build stock can mean fewer eligible properties to choose from in the medium term.
• Softer near-term competition: in the short run, a pullback in buyer inquiry and investor activity can mean less competition at project launches and display villages, which may work in a first home buyer's favour right now.

What this means for first home buyers

This is not a story about the market collapsing. It is a reminder that policy changes can ripple through the housing pipeline with a lag, and that today's caution among investors and developers can become tomorrow's tighter supply.

• If you are considering a house-and-land package, ask the developer or your agent directly about expected settlement or titling timeframes, since project delays or scale-backs can affect a build you have already put a deposit on.
• If a scheme like Help to Buy or a state grant is central to your plan and depends on buying new, start your search earlier rather than later, given the pipeline of new stock may thin out over the next year or two.
• If you are buying an established home instead, this news is less directly relevant to you, though a broader pullback in investor activity can still ease some competition at auctions and open homes.
• Whatever you buy, it is worth checking your own numbers now rather than waiting for the market to settle, since a working professional can help you weigh up new versus established stock for your situation.

Run the numbers

Use these tools to see how this shift in new-home supply could affect your own first home buying plan:

• Scheme Comparison Tool - see how Help to Buy and other new-build-linked schemes stack up against options that also work for established homes.
• Borrowing Power Calculator - check your borrowing capacity so you are ready to act if a suitable new-build release comes onto the market.
• Grant Stacker - work out which grants and concessions you may be able to combine, including any that require a new home.