Across Queensland prospective home owners are feeling the pinch of rising interest rates, higher building costs and labour shortages.
Nowhere has this been felt more acutely than in North Queensland, which has seen a 60 per cent drop in new home builds, according to recent data released by the Australian Bureau of Statistics.
Master Builders regional manager Emma Peters said the downturn was unsurprising given mounting financial costs for prospective builders and a 42 per cent jump in the cost of labour and materials since 2019.
"The inquiry levels on new builds are very much down as well as inquiry levels on new home loans for both existing properties and new builds," she said.
"If the interest rates stay where they are, rather than going up again, then hopefully, this is the worst the situation will get, but we don't have a crystal ball."
Cheaper to buy than build
Dominic Harris and his wife moved to Townsville in early 2022 after buying a block of land in the region.
However, within a couple of months of looking for builders, the couple decided the costs didn't add up.
"It's just too dear. We were very lucky to sell our land. By the time we looked at building from scratch we could buy a pre-existing home on a bigger block and still have change left over for a pool," Mr Harris said.
"In our experience, a $50,000 increase in Brisbane for raw materials equates to $100,000 plus up here.
"It comes down to dollar value. We were looking at building a two-storey house in Brisbane for $380,000 post-COVID that went up to $440,000. But even a builder in North Queensland wants $550,000 for a single storey because of all the cyclone proofing that needs to happen.
"I understand the cyclone proofing. But you think, well, maybe if that wasn't mandatory how much cheaper could houses be?"
Changes to zoning, code
Townsville builder Rob Rule said the downward trend could continue, impacted by a change to the way cyclonic regions were developed and where the boundaries lie that take effect from May 1.
"What used to be the old C1 cyclone rating, now moves to 10 kilometres off the coast so a lot more homes will be pushed up into the [higher standard] C2 cyclonic category," Mr Rule said.
"That's a stronger built home. It's a higher standard, so that adds an additional cost."
Mr Rule has been building in Townsville for more than 20 years. He said consumers were increasingly tentative to commit to a build given new planning regulations and changes to the National Construction Code which begin to come into effect next month.
"Later this year, we're also seeing changes coming in with energy efficiency and accessibility requirements," he said.
"I guess the government is forward looking into our ageing population, which is a great idea. However, it does have a cost impact.
"On the back of COVID, the government bringing these legislative changes into play this year is only going to further increase the cost of construction, so it would be very handy if the government stepped back a little bit."
Buyers turn to prefab
The statewide housing shortages and a 1 per cent rental vacancy in Townsville has seen a rise in interest for modular, prefabricated homes.
Warren Ryle's shipping-container-home business has been booming in the past 12 months.
"The interest this year is phenomenal. [As] interest rates keep going up, people are starting to lose their homes. They can't afford just the cost of everything," he said.
Shipping container homes will also be affected by changes to the existing National Construction Code.
In February, Master Builders Queensland called on the state government to postpone the new standardised regulations.
