After the second straight month of rising new homes sales, it appears that economic factors have made buyers more eager to build.
According to a monthly report from the Housing Industry Association (HIA), the volume of sales for newly-built houses increased once again in May 2025, indicating that demand may be returning to the market.
Australia has recorded the second straight month of increasing sales for new houses. Image: Getty
HIA's New Home Sales report indicated that the volume of new home sales increased by 6.9% in the month of May 2025, to reach the highest level in 13 months.
It comes after April’s figures indicated a 16.5% increase in sales of new houses, representing a 12-month high.
The data in HIA’s report is collected each month by surveying the largest volume home builders in the five largest states to provide an indication of how home building is trending.
Building becomes more attractive as economics shift
HIA’s senior economist, Maurice Tapang, noted that demand factors had recently tilted in favour of home building, following two cash rate cuts, rising prices for established homes, and strong economic factors such as low unemployment and strong population growth.
He commented, however, that growth had not been even across the country.
“Across the states, the results have been mixed. This month, New South Wales and Victoria were the only states surveyed to report increased sales volumes, albeit from very depressed levels,” Mr Tapang said.
The results for Australia's two largest states by population represent substantial uplift in each. Seasonally adjusted, NSW reached a 20-month high, while Victoria saw the highest volume in house sales in 13 months. Both of those previous highs were caused in large part by incoming regulatory changes that encouraged buyers to sign their contracts before new rules took effect.
In other words, this is the highest level of true demand in the home building market that either NSW or Victoria have experienced in quite some time.
Victoria had one of its best months for new home sales in more than a year. Image: Getty
Looking at the numbers from a three-month perspective, the highest increase was seen in Western Australia, where new home sales have rising 19.6% in the three months to May 2025.
This was followed by a 16.9% increase in Victoria, a 7.2% increase in Queensland and a 3.6% increase New South Wales. South Australia recorded a 5.8% decline during that three-month period.
Johnathon Driessen, general manager of communities at residential property consultancy RPM Group, noted that while there had not been a huge spike in enquiry volumes, buyers were increasingly ready to commit to building.
“Conversion rates are improving. The buyers we’re seeing are more serious. They’re ready to commit, and that’s a strong signal of underlying demand,” Mr Driessen said.
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