Sales of new homes rose to a 13-month high in May, according to a monthly survey of Australia’s builders.
The HIA New Home Sales report shows that the volume of new home sales increased by 6.9 per cent in the month of May 2025, to reach the highest level in 13 months.
HIA Senior Economist, Maurice Tapang noted the rise in sales follows the second cut to the cash rate in over four years.
“The monthly increase in new home sales is consistent with demand factors remaining robust, as Australia records low levels of unemployment, strong population growth and rising prices for established homes”, Tapang said.
Across the states, results have been mixed. New South Wales and Victoria were the only states surveyed to report increased sales volumes, albeit from very depressed levels.
“Sales volumes in New South Wales and Victoria have been exceptionally weak over the past two years”, Tapang suggested. “This increase is the first suggestion of an improvement in market conditions in these states.
“New South Wales reached a 20-month high since the pull-forward in new home sales in September 2023, while Victoria reached a 13-month high since its pull-forward in April 2024.
New home sales in Queensland remained relatively stable in May, following a strong increase in sales recorded in the previous month. This upward trend in the volume of sales in Queensland has been evident for at least the past year.
The volume of sales in South Australia and Western Australia also fell in the month but remain robust. The continuation of a $10,000 incentive for construction workers to relocate to Western Australia will assist to resolve its key constraint, labour capacity, Tapang suggests.
“Even with further cuts to the cash rate, and a recovery in market confidence, there remains a shortage of housing in Australia due to the regulatory barriers to increasing supply,” he concluded.
Over the three months to May 2025, sales of new homes rose by 19.6 per cent in Western Australia compared with the previous quarterly period. This was followed by Victoria (up 16.9 per cent),
Queensland (7.2 per cent) and New South Wales (3.6 per cent). Over the same period, South Australia recorded a 5.8 per cent decline in sales.