New homes selling strong

Sales of new homes remain at a three-year high, a recent survey shows.

The latest HIA New Home Sales report has revealed that the volume of new homes sold (contract-to-build) nationally decreased by 1.2 per cent in the month of August 2025.

HIA Senior Economist, Tom Devitt said that new home sales in the three months to August 2025 were 5.1 per cent higher compared to the previous quarter.

“Despite the slight monthly moderation, sales in the three months to August 2025 remain higher than any previous quarter in the last three years”, Devitt added.

The decrease in new home sales nationally was driven by falls across all states except Victoria, where sales increased by 7.1 per cent. The declines were led by Western Australia, with sales decreasing by 7.7 per cent, followed by Queensland (down 6.7 per cent), South Australia (6.0 per cent) and New South Wales (1.2 per cent).

According to Devitt, this indicates that cuts to the cash rate are leading to a return in home buying activity, albeit very slowly.

“Demand for housing continues to increase due to elevated population growth and sustained low levels of unemployment”, he said.

“These factors have contributed to an increase in home buying activity, leading to an increase in the price of established homes.

“Ongoing competition for a limited stock of established homes available for purchase has seen buyers moving into new home building as an alternative.

“The supply side stimulus resulting from the Australian Government’s decision to remove the requirement for mandatory Lenders’ Mortgage Insurance (LMI) for first home buyers, will also boost new home sales.

“Around a third of all new homes are built by first home buyers and they play an important role in increasing housing supply.

“Reducing the barriers to entry for first home buyers will lead to an increase in housing supply, putting downward pressure on prices beyond the short term and increasing rates of homeownership”, Devitt concluded.