In 2025, investing in real estate is about much more than location-it’s about seizing the rightopportunity, managing costs, and navigating market conditions that extend far beyond our Aussieshores. One of the major contributors to this at the moment isthe implementation of tariffs in the U.S.While we might feel geographically removed from all the tariff talk, the reality is that tariffs will likelydrive up the cost of key materials, such as aluminium and steel, globally. This, in turn, is anticipatedtoaffect theprices of essential building productslike windows, steel frames, concrete, and structuralbeams here in Australia. Add to this supply chain disruptions and economic uncertainty, andestablished homes are becoming an increasingly attractive option for buyers.
Here, we break down eight key reasons a pre-loved home-as an investment or a primary residencemight be your best bet for 2025
1. Escalating costs for new builds
According toCoreLogic's latest Cordell Construction Cost Index(CCCI), residential construction costsgrew by 3.4% over the 12 months to December 2024-the largest annual rise since September 2023.These prices are now an astonishing31% higher than pre-COVID levels.Inflation and supply chainissues have driven up prices for structural materials like concrete, wood, and steel, and theseincreases have trickled down to impact the prices of frames, fixtures, fittings, including flooring,cabinetry, windows, and doors. As a result, many new builds are subject to escalating costs andtimeline setbacks, making established homes a more cost-effective, stable, and predictable choice forbuyers.
2. The slowing pace of construction
The averagehouse and townhouse takes 40% longer to build now than it did in 2010-11. Factors likesupply chain disruptions and ongoing skilled labour shortages have continued to slow down builds,and we’re also facing President Donald Trump’spush for higher tariffs. Supply chain managers arecurrently grappling with the impact of these astrade flows shift, stockpiling occurs, and businessesexplore alternative sourcing strategies. Rising material and labour costs and international tariffs add to the challenge, making it harderfor builders to stay on schedule and within budget. All of this leads tolonger wait times, leaving you in limbo and, of course, increasing costs.
3. Hidden and unexpected costs
Rising material costs, shifting government regulations, and unaccounted-for costs, like landscapingand utility connections, contribute to budget blowouts; however, these costs and labour shortages arenot the only hidden costs you need to be aware of.According to industry experts, government-imposed charges such as GST, planning charges, water and sewer connection fees, and othercouncil-related fees are lesser-recognised factors drivingup new-build housing prices. With a pre-loved home, what you see is what you get-without the risk of unexpected expenses.
4. Established homes, established neighbourhoods
If you’re searching for a home conveniently located near your workplace, yourchildren's schools, orpublic transportation, you’ll typically find existing homes that tick these boxes over new builds, whichare often found in less-central locations. And often, buyers are finding that new homeslack a floor plansuitable for family living. While you can take a gamble on a new area growing over the long term,if it’sa rental property, you may experience lower demand and lower rents over the short term-that’s wherea rental appraisal from aknowledgeable local expertcan help!
5. Character, charm, and rich history
Polished timber floors, ornate fireplaces, crown moulding, wraparound verandas and establishedgardens give pre-loved homesa warmth and character that’s difficult to replicate. Beyond aesthetics,older homes also carry a story, and a walk through their rooms can feel like stepping back in time.You’ll feel the rich history under yourfeet, with hardwood floors, classic staircases and renovated orremodelled spaces giving you a glimpse into how our way of life has evolved over time. Each roomtells its own tale, from the original features to the modern updates, creating a harmonious blend ofpast and present. It’s a unique kind of magic that you’ll only find in a preloved home within existingcommunities.
6. Emotional appeal prevails on the day
Buying a homeis more than just crunching numbers and satisfying your basic needs. It’s ahugelyemotional journeywhere psychological and logical forces compete for your attention. And often, it’syour emotions that prevail on the day. While there’s a certain appeal to new homes with their freshpaint smell and shiny new features, stepping into an older home in a well-established neighbourhoodoften pulls on your heartstrings inexplicably. There’s a certain soul in pre-loved homes that trumpscookie-cutter designs every time. And for many, it’s what makes you feel instantly at home.
7. Energy efficiency isn’t reserved for brand new
A common selling point for new builds is their energy efficiency. However, older homes are quicklyclosing the gap. Many have already been upgraded with solar panels, insulation, and double-glazedwindows, making them, in some cases,more efficient than new builds. And if a preloved home you have your eye on hasn’t already been upgraded,retrofitting it with energy-saving featuresis oftenmore affordable than buying new. You’ll also reap the benefits of ongoing heating and cooling savings,as older homes were built with zoning–distinct areas for different functions–which makes it easier toheat and cool specific areas. Finally, choosing an existing home is a more sustainable option; you’ll beoptimising an existing structure rather than contributing to thesignificant environmental impactsassociated with new builds.
8. Add value with renovations, at your own pace
While older homes might require some renovation or updating, these costs are oftenmore affordablethan purchasing a brand-new home-particularly as we see theimplementation of global tariffsdrivingup construction costs. Opting for locally sourced, Australian-made materials can help you avoid UStariffs while also supporting local businesses. Renovations can be phased to suit your budget andallow you the flexibility to personalise the space to your needs andfocus on value-adding additions-which is another huge drawcard for existing homes. Within this process, repurposing materials ratherthan purchasing new materials is not only cost efficient, but also eco-friendly. Unlike new builds, whichoften taketime to appreciate, pre-loved homes in established areas tend to have a proven track recordof capital growth-especially if you’ve focused on improvements that boost value. Ultimately, thecombination of lower upfront costs and the ability to enhance the home’s value over time makes thischoice hard to beat.
You’ve gotta love preloved
While new homes have their crisp, clean, and plush underfoot appeal, the reality of rising constructioncosts, supply chain delays, and uncertain timelines makes new builds a less predictable and challenging investment. Established homes, on the other hand, can offer you affordability, the ability to renovate to your tastes at your own pace, and a unique slice of history that’s impossible to replicate.
Thinking about making a move? Download our freeFirst Home Buyers Guidefor the lowdown oneverything you need to know, or reach out to your localFirst National Real Estateteam and startexploring the right community for you.