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Throughout the June quarter, there was an 18.8 per cent increase in the sales of detached homes, according to HIA’s New Home Sales Report.
This is the biggest increase in new home sales in nearly three years.
The 25-basis-point rate cuts in both February and May have been attributed to this strong performance.
With plenty of economists penning two more 25-bp cuts in 2025, the trend is likely to continue.
HIA chief economist Tim Reardon said the recovering economy is helping boost sales, such as low unemployment, recovering wages, and elevated housing demand due to population growth.
Every state and territory recorded a rise in sales over the quarter. However, NSW remains subdued in comparison as high costs are keeping buyers out of the property market.
The growth of sales in the recorded states was:
- Victoria (27.7 per cent)
- Queensland (26.2 per cent)
- Western Australia (11.3 per cent)
- South Australia (9.9 per cent)
- NSW (9.3 per cent)
The month of June reported a drop in sales in NSW, Victoria, and Western Australia.
According to Reardon, the western state was affected due to tradie labour shortages.
However, the government’s $10,000 incentive for construction workers to relocate to Western Australia could rectify these challenges.
More affordable areas like Queensland and South Australia saw monthly increases in sales not achieved in years.
“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,” said Reardon.
Victoria’s strong growth reflects a healing property market. Melbourne was recently crowned Australia’s most affordable capital for investors.
Supply has remained strong, as Victoria reported the highest number of dwelling approvals throughout the month of May, up 9.5 per cent.
[Related: Slump to surge: Rate cuts fuel housing rebound]
