Rate cuts and incentives drive strongest sales growth in nearly three years
Sales of new detached homes across Australia rose sharply in the three months to June 2025, according to the latest data from the Housing Industry Association (HIA).
The HIA New Home Sales report, which surveys major builders in the nation’s five largest states, showed an 18.8% increase compared to the previous quarter.
“This is the strongest performance for new home sales in almost three years,” said Tim Reardon (pictured), chief economist at the Housing Industry Association.
Reardon attributed the upswing to two reductions in the cash rate this year, alongside end-of-financial-year incentives offered by builders amid heightened competition. He noted that robust employment, improving real wages, and sustained population growth have also supported demand for new homes.
“Sales of new homes are 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,” Reardon said.
The HIA report also showed that despite the quarterly gains, new home sales volumes in New South Wales and Victoria remain subdued, with high land prices continuing to weigh on activity in these markets. In contrast, Queensland and South Australia recorded sales increases in June, reaching 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. The ongoing $10,000 incentive for construction workers to relocate to Western Australia attempts to resolve this issue,” Reardon said.
Looking ahead, Reardon expects further cash rate cuts and improving market sentiment to support the sector. However, he cautioned that housing supply remains restricted by tax and regulatory hurdles.
All states posted higher new home sales in the June quarter compared to the previous three months. Victoria led with a 27.7% rise, followed by Queensland (26.2%), Western Australia (11.3%), South Australia (9.9%), and New South Wales (9.3%).
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