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The Housing Industry Association’s (HIA) latest New Home Sales report has shown an increase of 4.1 per cent in new home sales in January 2025, recovering from weaker sales towards the end of 2024.
Additionally, the report found that the volume of new homes sold across Australia in the three months to January 2025 was also 4.1 per cent higher when compared to the same period last year.
HIA economist Maurice Tapang said that this monthly rise in new home sales happened prior to the February cash rate cut, which is expected to provide a further boost to market confidence.
Furthermore, Tapang said that sales have lifted off a very low base, which is consistent with stable economic conditions.
“Unemployment remains at very low levels, while there remains an acute shortage of housing stock,” he said.
While sales have recovered, low sales volumes across NSW and Victoria have “obscured an improvement in Western Australia, Queensland and South Australia,” according to Tapang.
Indeed, the report found that Victoria was the only observed state to record a decline in new home sales, falling by 6.6 per cent quarterly in the three months to January 2025.
HIA executive director Keith Ryan said: “When compared to the previous year, new home sales in Victoria have remained virtually unchanged, falling by 0.5 per cent.
“This makes Victoria the only one of the five largest states to have not seen an improvement in sales from this cycle’s trough. Australia’s largest home building market should be doing much better than this with a growing population and high employment rates.
“This flat result in new home sales is also evident in other leading indicators of home building activity, with house approvals in the 2024 calendar year up by just 1.5 per cent compared to 2023.”
In the three months to January, new home sales increased by 70.5 per cent in NSW compared to the same time last year, albeit off a very low base.
This was followed by South Australia with an increase of 22.3 per cent and a 12.3 per cent increase in Queensland.
“This likely reflects the relative affordability of these markets, with the cost of a new detached house in Sydney and Melbourne prohibitively expensive for a larger number of households,” Tapang said.
“The volume of detached house approvals in Australia has also picked up, with the 2024 calendar year seeing 6.8 per cent more houses approved for construction compared to 2023.
“The rise in new home sales and new detached house approvals is consistent with expectations of an increase in the volume of homes commencing construction this year.”
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