Monthly decline follows end of financial year, but quarterly sales remain strong
New home sales in Australia fell by 6.4% in July compared to June, according to the latest data from the Housing Industry Association (HIA). The drop comes after sales reached a near three-year high in the previous month.
The HIA New Home Sales report, which surveys major volume builders across the five largest states, serves as an early indicator of future detached home construction activity.
“The cycle of ongoing growth in new home sales was broken in July, with a 6.4% fall compared to June,” said Maurice Tapang, senior economist at HIA. “The fall in sales in July 2025, from a near 33-month high, is likely due to the end of financial year sales.”
Despite the monthly decline, new home sales over the three months to July 2025 rose by 15.9%, marking the highest quarterly figure since September 2022 and signalling increased opportunities for mortgage brokers as more buyers seek financing for new builds.
Tapang noted that recent reductions in the cash rate have contributed to the increase in sales. He also pointed to rising prices in established homes as a factor encouraging more households to consider new builds.
“The fall in sales in July was driven by declines in New South Wales, Victoria and Queensland, while gains were recorded in South Australia and Western Australia,” Tapang said. “Over a three-month period to July 2025 all markets saw increases in new home sales. This points to volatility being the driver of this month’s decline.”
He added that population growth and low unemployment are supporting demand for new homes. However, he cautioned that the recent improvement in sales is unlikely to be enough to meet the national target of 1.2 million new homes.
“This improvement in sales through the start of 2025 will not be sufficient to reach the goal of 1.2 million homes,” he stressed. “More significant structural changes to the way in which new home building is taxed and regulated will also be necessary.”
All states recorded higher new home sales in the three months to July 2025 compared to the previous quarter. Victoria led with a 23.4% increase, followed by South Australia (23.1%), New South Wales (18.8%), Queensland (13.3%) and Western Australia (2.6%).
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