Budget-friendly infill homes: Top 6 areas under $850k

Adviseable property buyer, Kate Hill, said building new homes on underutilised land has gained popularity with buyers looking for affordability in the current competitive housing market.

“With the shortage of quality listings in many areas, constructing a property is becoming a viable option for buyers who don’t want to wait indefinitely for the right house to hit the market,” Hill said.

“With market conditions increasingly favouring new construction over waiting for that elusive existing hidden housing gem, the ability to construct a tailored, modern home at a competitive price is becoming more of an enticing prospect for home buyers and investors alike.”

Hill said that investors were to benefit the most from building new, as they benefit from tax incentives.

“New properties offer better tax deductions, lower maintenance costs, greater appeal to tenants and buyers, and the advantage of builders’ warranties for peace of mind,” she said.

“Plus, tax depreciation benefits on brand new homes are substantially higher than on older properties.”

Additionally, Hill said stamp duty savings offset the common concern over holding costs without rental income during construction.

“Say, we build a new property in Queensland for $1.1 million with an interest bill on the land and construction loans equating to about $27,00 over the 30-week purchase/construction time frame.

“The savings in stamp duty for building new versus buying an equally priced established property equals about $25,000, so there is not much difference between the two scenarios at this point, with the stamp duty savings mostly cancelling out the loss of rental income during the period.”

She said that buyers have also had the misconception that new builds are more expensive than established properties, when it is usually similar to the median house prices of the area.

Hill said that building new also eliminates the hidden defects of established properties, which often have material, appliance and fixtures issues that need to be picked up during the pest inspection report.

“Building from the ground up provides control. Everything is brand new, covered by warranties, and built to last.”

Hill said while investors gain the most from infill building, first home buyers can also benefit from stamp duty savings and the First Home Owner Grant (FHOG), easing the challenge of saving for a deposit.

Here are the top six spots for infill home building:

Ballarat, Victoria

Hill said that Ballarat offers strong appeal for both home buyers and investors due to its growing economy, major infrastructure projects, and relative affordability.

She pointed out that the city’s diverse economic base, low rental vacancies, rising land values, and ongoing developments in education, healthcare, and renewable energy, shows strong potential for long-term capital growth.

“It offers a cost-effective alternative to Melbourne while still benefiting from its proximity, thanks to the upgraded fast train service,” she said.

Geelong, Victoria

According to Hill, Geelong has become one of the strongest regional property markets, driven by its booming economy, major infrastructure projects, and affordable housing.

She said the city proximity to Melbourne, large-scale urban expansion, rapidly growing population, diverse job opportunities, and low vacancy rates have helped Geelong become an investor hotspot.

Moreton Bay, Queensland

Moreton Bay, a key growth area in Greater Brisbane, offers strong potential for home buyers and investors, thanks to its affordability and major infrastructure developments like the Petrie University and Caboolture Hospital upgrade.

Hill said the city’s rapid population growth is expected to hit 500,000 within 20 years, backed by planned transport links, business hubs, and new schools, has been boosting long-term investment appeal.

“Its diverse housing options, extensive green spaces, and strong government backed development ensure sustained demand, making Moreton Bay a promising investment location for home buyers and investors,” she said.

Northern Adelaide, South Australia

Hill said that Northern Adelaide is rapidly becoming a property hotspot, driven by major infrastructure, strong economic momentum, low vacancy rate, and rising prices.

“For example, the City of Salisbury benefits from major industrial developments, including the $1.9 billion Edinburgh Parks Precinct, alongside strong employment opportunities in defence, logistics, and food manufacturing,” she said.

“Meanwhile, Playford is South Australia’s fastest-growing LGA, offering affordable housing, exceptional rental yields, and large-scale urban regeneration.

“Government-backed projects, such as the $250 million Playford Alive Town Centre redevelopment and multiple transport upgrades, enhance long-term investment appeal.”

Northern Perth, Western Australia

Perth’s northern corridor presents a compelling investment opportunity, combining affordable property prices, major infrastructure upgrades, and strong population growth.

Hill said that Perth coastal living is paired with quality amenities like schools, healthcare and transport, attracting buyers.

Additionally, investors can benefit from low rental vacancy rates and government-backed projects, such as the Metronet rail extension and expansive residential developments.

“Key suburbs like Alkimos, Yanchep and Two Rocks are fast-growing, ensuring continued demand. This region is poised for long-term capital appreciation and solid rental yields.”

Toowoomba, Queensland

Toowoomba’s property market is thriving, providing a stable and affordable alternative to Brisbane for both home buyers and investors.

Hill said that major infrastructure projects like the Wellcamp Airport and Toowoomba Bypass have been boosting connectivity and driving population growth, while the city’s diverse economy, low unemployment, and broad buyer appeal support strong ongoing demand.

“With a history of steady capital growth and resilient market conditions, Toowoomba continues to stand out as a promising location for long-term investment and solid rental returns,” Hill concluded.