New home sales performing strongly

SALES of new detached homes increased by 18.8 per cent in the three months to June 2025 compared to the previous three months, according to the latest New Homes Report from the Housing Industry Association (HIA).

The HIA New Home Sales report is a monthly survey of the largest volume home builders in the five largest states and is a leading indicator of future detached home construction.

“This is the strongest performance for new home sales in almost three years,” HIA chief economist Tim Reardon said.

“The rise in sales reflects the impact of two cuts to the cash rate this year and EOFY incentives that have been on offer given the competitive nature of the home building market.

“The increase in new home sales is supported by low levels of unemployment, recovering real wages and elevated housing demand from ongoing population growth.

He said sales of new homes were higher in all states in the three months to June compared to the previous quarter, despite a drop in sales in the most recent month in New South Wales, Victoria and Western Australia.

“Despite this increase the volume of sales in New South Wales and Victoria remain very low with elevated land costs holding back Australia’s largest states for longer than the more affordable states.

“Sales increased in the month of June in Queensland and South Australia to push them to multi-year highs.

“Western Australia’s builders continue to be constrained by labour shortages, preventing them from taking on more work despite ongoing strong demand for housing.”

Mr Reardon said the ongoing $10,000 incentive for construction workers to relocate to Western Australia was an attempt to resolve this issue.

“Despite expected further cuts to the cash rate and a recovery in market confidence, there remains a shortage of housing in Australia due to the tax and regulatory barriers to increasing supply.”

All states had increased new home sales in the June quarter 2025 compared to the previous quarter led by Victoria (+27.7 per cent).

This was followed by Queensland (+26.2 per cent), Western Australia (+11.3 per cent), South Australia (+9.9 per cent) and New South Wales (+9.3 per cent).