But longer-term trend remains positive
The number of new homes sold under contract across Australia fell by 1.2% in August, according to the latest figures from the Housing Industry Association (HIA).
Despite the monthly decline, sales for the three months to August 2025 were 5.1% higher than in the previous quarter and remain higher than any previous quarter in the last three years.
The overall decline in August was largely due to lower sales in most states, with Victoria the only state to record an increase, up 7.1%. Western Australia experienced the largest fall at 7.7%, followed by Queensland (down 6.7%), South Australia (down 6%), and New South Wales (down 1.2%).
According to Tom Devitt (pictured right), senior economist at HIA, recent reductions in the cash rate have begun to support renewed home buying activity, though the pace of recovery remains gradual.
HIA’s New Home Sales report indicated that population growth and continued low unemployment have sustained demand for housing, contributing to higher prices for established properties, while limited availability of established homes has prompted more buyers to consider new builds.
Changes to lending policy are also expected to influence the market. The federal government’s removal of mandatory Lenders’ Mortgage Insurance (LMI) for first-home buyers is anticipated to further stimulate 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,” Devitt said. “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.”
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