Sales of new detached homes have hit their strongest levels in nearly three years, according to the latest figures from the Housing Industry Association (HIA).
In a major uplift for the residential construction sector, sales rose by 18.8 per cent in the three months to June 2025 compared to the previous quarter.
“This is the strongest performance for new home sales in almost three years,” stated HIA Chief Economist, Tim Reardon.
The findings come from the HIA New Home Sales report, which surveys the country’s largest volume home builders across the five biggest states. As a forward-looking indicator, it provides early insights into the pace of future detached home construction.
Mr Reardon pointed to a combination of monetary policy and market conditions fuelling the rebound in activity.
“The rise in sales reflects the impact of two cuts to the cash rate this year and EOFY incentives that have been on offer given the competitive nature of the home building market,” he said.
He also noted that broader economic stability is playing a role in supporting housing demand.
“The increase in new home sales is supported by low levels of unemployment, recovering real wages and elevated housing demand from ongoing population growth.”
State-by-state breakdown
Sales volumes rose across all five major states in the June quarter, led by Victoria (+27.7 per cent), followed by Queensland (+26.2 per cent), Western Australia (+11.3 per cent), South Australia (+9.9 per cent) and New South Wales (+9.3 per cent).
However, monthly figures for June show a more mixed picture, with sales dipping in New South Wales, Victoria and Western Australia.
“Despite this increase, the volume of sales in New South Wales and Victoria remain very low with elevated land costs holding back Australia’s largest states for longer than the more affordable states,” Mr Reardon explained.
In contrast, Queensland and South Australia posted month-on-month growth in June, reaching multi-year highs.
Despite Western Australia’s strong quarter, ongoing labour shortages continue to constrain its builders’ capacity.
“Western Australia’s builders continue to be constrained by labour shortages, preventing them from taking on more work despite ongoing strong demand for housing,” said Mr Reardon.
He added that the state government’s $10,000 incentive for construction workers to relocate to WA is a step towards addressing the bottleneck.
Structural constraints remain
While the outlook for detached housing has improved, Mr Reardon cautioned that supply constraints remain an ongoing issue.
“Despite expected further cuts to the cash rate and a recovery in market confidence, there remains a shortage of housing in Australia due to the tax and regulatory barriers to increasing supply,” he concluded.
