New home sales continue to flourish, according to a monthly survey of Australia’s larger home builders.
The latest HIA New Home Sales report has revealed that sales of new homes increased by 4.9 per cent in the month of April.
Victoria recorded a monthly increase of 20.9 per cent, followed by South Australia, where sales were up 11.5 per cent. Declines were observed in Queensland (down 14.9 per cent), New South Wales (3.1 per cent) and Western Australia (1.0 per cent).
HIA Chief Economist Tim Reardon remarked that this is a solid result with sales in the three months to April 4.6 per cent higher compared to the previous quarterly period.
“This outcome likely reflects the momentum carried over from late last year prior to recent rate increases, alongside strong growth in established house prices”, Reardon said.
“Ongoing housing supply shortages have driven dwelling price growth in some markets and improved the feasibility of new home building.
“More broadly, demand for housing remains strong, underpinned by structural drivers.
“Strong population growth and low unemployment continue to sustain demand even in a higher interest rate environment.
“These fundamentals suggest that, while interest rates are an important factor, they will not materially alter the underlying need for new homes.
“However, the capacity to respond to this demand remains constrained. Labour shortages and elevated, rising construction costs are expected to persist through 2026, while access to shovel-ready land continues to limit the number of homes that can be delivered.
“Emerging domestic and global uncertainty will pose risks to new home building, with the coming months providing clearer evidence of how sensitive demand is to the current environment.” concluded Reardon.
The latest HIA New Home Sales Report is available for download from the HIA website.