According to the Housing Industry Association (HIA), new home sales rose by 16.5 per cent in April 2025, marking a significant turnaround from the previous month’s decline.
HIA Economist Maurice Tapang said the surge has come on the back of February’s interest rate cut, the first reduction in over four years.
“This rise arose likely as a result of the rate cut in February 2025, the first one in over four years,” Mr Tapang said.
The recovery follows a period of reduced activity due to adverse weather conditions, including Cyclone Alfred, which had dampened home buying in certain regions.
Several economic factors are supporting the renewed interest in new homes, including low unemployment rates, improving real wages, and sustained housing demand driven by ongoing population growth.
The data suggests that the home building sector may have passed its lowest point, confirming industry expectations of increased activity throughout 2025.
However, the recovery appears uneven across different regions of Australia, with Western Australia, Queensland, and South Australia identified as the primary growth engines for the sector.
In the three months leading to April 2025, Western Australia recorded the strongest performance with a 23.7 per cent increase in new home sales compared to the previous quarter.
Queensland followed with an 8.2 per cent rise, while New South Wales saw a modest 2.2 per cent improvement.
Not all states are experiencing the same positive trajectory.
Victoria has struggled at the beginning of 2025, with consecutive monthly declines in sales resulting in a 17.7 per cent drop for the three months to April compared to the same period last year.
South Australia also experienced a 13 per cent decline in the quarterly comparison, despite being identified as one of the potential growth drivers for the year ahead.
New South Wales has shown signs of improvement, though experts note this comes after “anaemically low levels” over the previous two years.
With another interest rate cut delivered in May and expectations of further reductions, industry analysts anticipate continued growth in the new home sales market.
The HIA New Home Sales report, which surveys the largest volume home builders across the five largest states, is considered a leading indicator of future detached home construction activity.
“With another rate cut having been delivered in May and expectations of further cuts on the horizon, it would not be surprising to see increases in new home sales in the months ahead,” Mr Tapang said.
