In 2025, investing in real estate is about much more than location – it’s about seizing the right opportunity, managing costs, and navigating market conditions that extend far beyond our Aussie shores. One of the major contributors to this at the moment is the implementation of tariffs in the U.S. While we might feel geographically removed from all the tariff talk, the reality is that tariffs will likely drive up the cost of key materials, such as aluminium and steel, globally. This, in turn, is anticipated to affect the prices of essential building products like windows, steel frames, concrete, and structural beams here in Australia. Add to this supply chain disruptions and economic uncertainty, and established 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 residence might be your best bet for 2025.
1. Escalating costs for new builds
According to CoreLogic’s latest Cordell Construction Cost Index (CCCI), residential construction costs grew by 3.4% over the 12 months to December 2024 – the largest annual rise since September 2023. These prices are now an astonishing 31% higher than pre-COVID levels. Inflation and supply chain issues have driven up prices for structural materials like concrete, wood, and steel, and these increases 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 and timeline setbacks, making established homes a more cost-effective, stable, and predictable choice for buyers.
2. The slowing pace of construction
The average house and townhouse takes 40% longer to build now than it did in 2010-11. Factors like supply chain disruptions and ongoing skilled labour shortages have continued to slow down builds, and we’re also facing President Donald Trump’s push for higher tariffs. Supply chain managers are currently grappling with the impact of these as trade flows shift, stockpiling occurs, and businesses explore alternative sourcing strategies. Rising material and labour costs and international tariffs add to the challenge, making it harder for builders to stay on schedule and within budget. All of this leads to longer 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 landscaping and utility connections, contribute to budget blowouts; however, these costs and labour shortages are not 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 other council-related fees are lesser-recognised factors driving up 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, your children’s schools, or public transportation, you’ll typically find existing homes that tick these boxes over new builds, which are often found in less-central locations. And often, buyers are finding that new homes lack a floor plan suitable for family living. While you can take a gamble on a new area growing over the long term, if it’s a rental property, you may experience lower demand and lower rents over the short term – that’s where a rental appraisal from a knowledgeable local expert can help!
5. Character, charm, and rich history
Polished timber floors, ornate fireplaces, crown moulding, wraparound verandas and established gardens give pre-loved homes a 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 your feet, with hardwood floors, classic staircases and renovated or remodelled spaces giving you a glimpse into how our way of life has evolved over time. Each room tells its own tale, from the original features to the modern updates, creating a harmonious blend of past and present. It’s a unique kind of magic that you’ll only find in a preloved home within existing communities.
6. Emotional appeal prevails on the day
Buying a home is more than just crunching numbers and satisfying your basic needs. It’s a hugely emotional journey where psychological and logical forces compete for your attention. And often, it’s your emotions that prevail on the day. While there’s a certain appeal to new homes with their fresh paint smell and shiny new features, stepping into an older home in a well-established neighbourhood often pulls on your heartstrings inexplicably. There’s a certain soul in pre-loved homes that trumps cookie-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 quickly closing the gap. Many have already been upgraded with solar panels, insulation, and double-glazed windows, 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 features is often more 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 to heat and cool specific areas. Finally, choosing an existing home is a more sustainable option; you’ll be optimising an existing structure rather than contributing to the significant environmental impacts associated with new builds.
8. Add value with renovations, at your own pace
While older homes might require some renovation or updating, these costs are often more affordable than purchasing a brand-new home – particularly as we see the implementation of global tariffs driving up construction costs. Opting for locally sourced, Australian-made materials can help you avoid US tariffs while also supporting local businesses. Renovations can be phased to suit your budget and allow you the flexibility to personalise the space to your needs and focus on value-adding additions – which is another huge drawcard for existing homes. Within this process, repurposing materials rather than purchasing new materials is not only cost efficient, but also eco-friendly. Unlike new builds, which often take time to appreciate, pre-loved homes in established areas tend to have a proven track record of capital growth – especially if you’ve focused on improvements that boost value. Ultimately, the combination of lower upfront costs and the ability to enhance the home’s value over time makes this choice hard to beat.
You’ve gotta love preloved
While new homes have their crisp, clean, and plush underfoot appeal, the reality of rising construction costs, 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 free First Home Buyers Guide for the lowdown on everything you need to know, or reach out to your local First National Real Estate team and start exploring the right community for you.
DISCLAIMER
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.