If you've been waiting for the right moment to build your dream home, the stars are aligning in 2026. After several years of rising interest rates and construction cost pressures, housing industry leaders are pointing to a more balanced market in 2026 thanks largely to interest rate cuts and a stabilisation of house price growth.
For home builders in the Wollongong and Illawarra region, there's no time like the present to build a home that's cost-efficient, future-proof and suits your lifestyle.
In this article, we'll take an in-depth look at why 2026 is the prime time to build your dream house. From national and local trends affecting construction to what's happening with the price of materials, here you'll find all the information you need to make an informed decision about building in 2026.
From predictions of lower mortgage repayments to increased home values, current market conditions mean that now is the time to act if home ownership is your dream for 2026.
The boom years are over. However, that's not to say the good times have come to an end. According to housing market analyst Michael Matusik, more stable growth in the housing market can be expected in 2026 as the market enters a 'mature' phase. Rather than rapid price rises and peak-bubble collapse scenarios, building in 2026 will carry less risk than in previous years.
While market conditions will steady, house price growth is still expected. This is not just at a national level, but also in urban centres like Wollongong, where 6-7% gains are expected. This means that new builds can gain value faster, protecting your investment.
While rising construction costs and labour shortages have plagued the construction sector in recent years, several stabilising factors have renewed sector confidence, keeping projects moving. Recent planning reforms in New South Wales and government incentives to boost housing supply, as well as falling interest rates and rising land values, mean that there's never been a smarter time to build a new home.
Although global commodity and material price pressures are lessening, 2026 is the time to lock in design decisions and pricing while conditions are stable. Construction price forecasts predict that the next wave of demand, which will push costs higher, isn't far away.
In Australia, the cost of materials like steel and timber won't drop significantly in 2026, but jumps will slow. Therefore, by acting quickly, many buyers will be able to lock in better pricing on structural elements, which account for a large percentage of the cost of building a house.
If you're a first-home buyer, building in 2026 can help you access benefits that will reduce upfront costs. These include the $10,000 First Home Owner (New Homes) Grant and Stamp duty concessions under the First Home Buyer Assistance Scheme.
Government support for skills training, as well as reforms to streamline planning and approvals, are also helping address pressures at the policy level. Additionally, the state's push to unlock more land through the Building Homes for NSW program means more opportunities to find a suitable site in the Illawarra.
With all these incentives in 2026, building now may enable you to lock in better value thanks to financial incentives and faster approvals.
From home automation to sustainable design, 2026 isn't just a good time to build due to market confidence - it's also a great time to invest in the future as tools and smart home design elevate and future-proof homes to a never-before-seen level.
For example, new homes in NSW must meet minimum energy efficiency levels under the Nationwide House Energy Rating Scheme. This means that at a time when many are struggling to keep up with the cost of rising energy prices, new home investors are a step ahead.
Not only will taking the first step in 2026 make your home worth more (particularly in the Illawarra where the market demands these innovations), it also adds more value to your lifestyle compared to waiting.
One of the biggest risks of custom builds over the past several years has been delays caused by trade shortages. However, the NSW government has begun addressing this issue with significant investments, and the flow-on effects are beginning to be felt. One such initiative is the record $3.4 billion funding for TAFEs to drive thousands more apprentices into construction over the next 2-year period.
By starting your build process in 2026, you’ll be able to benefit from the strengthening of the market and avoid major delays that drive up costs.
In the early years of having a home loan, a large portion of your mortgage payments goes towards interest. With many economists predicting the cash rate will decline toward 3.10% by mid-2026, acting now to begin your build means that you'll not only be in for more favourable borrowing conditions, but you'll start tipping the balance on your mortgage sooner.
With forecasts showing house price growth across the country (and up to 7% in the Wollongong/Illawarra region), building a custom home may offer better value over buying an existing home. As the saying goes, "You have to be in it to win it", so act now to take advantage of the extra time in a more stable market.
Don't wait for the swing toward a buyer's market when there is more value to be found in creating a custom home that suits your requirements and lifestyle.
At A Class Building and Construction, we have seen plenty of ups and downs during our more than 45 years of combined experience building homes in the Wollongong and Illawarra region. In that time, we have gained expert local market knowledge and a proven track record for creating luxurious custom homes.
Our work has even won us Master Builders Association of NSW and Regional Excellence in Building Awards. But that's not why we strive for excellence. We do it because we believe in collaborating with homeowners to create unique homes that they will live in and enjoy for many years to come. Our 100% satisfaction guarantee is proof that everything we do, we do with our clients' happiness in mind.
Want to build in the Illawarra or Wollongong region in 2026? Here's how to get started.
Whether it's cheaper to build or buy in 2026 depends largely on localised markets. In Wollongong, the median house price is currently $1.295 million, while a single-storey architectural home can range from $1-2 million, depending on its size and style.
In recent years, the construction and housing industries have been plagued by volatility in materials prices, labour shortages, rising interest rates and fragmented house price growth. However, in 2026, it's predicted that house and materials prices will stabilise, rates will drop, labour pressures will ease, and demand for homes will stay high. All of these factors combined make it an ideal time to build.
To choose the right builder, you should look for a local business with a strong reputation, established relationships with local suppliers and expert knowledge of local bylaws that will help streamline the building process.
The year 2026 represents a sweet spot for people looking to build their own home. Material prices are stabilising, labour shortages are easing, finance conditions are set to improve, and reforms are helping to streamline the process.
Start planning now, and you'll be all set to take advantage of the steady and stable construction conditions in 2026. Take the first step and visit the A Class Building and Construction website to book a building consultation.
