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{{propApi.successMessage}} {{region}} Change locationPolicy changes see spike in home building
Policy changes see spike in home building
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The HIA New Home Sales report is a monthly survey of the largest volume home builders in the five largest states and is a leading indicator of future detached home construction.
“The volume of new homes sold nationally increased by 25.9 per cent in the month of September 2025. This is the largest monthly increase since the final phase of the HomeBuilder grant in March 2021,” added Mr Reardon.
“This sees sales in the September quarter a more modest 4.0 per cent higher, to reach its highest quarterly volumes since October 2022.
“Sales of new homes in September were notably stronger in New South Wales and Victoria where sales have previously struggled to recover despite the cut to the cash rate. These markets have been very slow to respond to the cuts to the cash rate.
“The rise in sales in New South Wales and Victoria could be a sign that new home building is returning to more average levels, but further data will be necessary to support this view.
“The cut to the cash rate is the primary driver of the rise in sales of new home this year. Other factors include low unemployment, strong population growth and rising established home prices.
“The rise in established home prices is seeing more households choosing to build a new home, because it is cheaper than an established home.
“The removal of the requirement for LMI for first home buyers has seen builders across the country report increased first home buyer activity.
“Lowering the cost of borrowing is expected to see an increase in new home building, and therefore have a positive impact on the supply of homes. Because this policy change doesn’t impact the amount a first home buyer can borrow, it doesn’t add to their risk of default.
“Around a third of all new homes are built by first home buyers and they play an important role in increasing housing supply.
“The announcement is likely to have seen more confidence in the market outlook for all households, not just first home buyers.
“Additional policy reforms including accelerated approvals processes in New South Wales through complying development pathways (CDCs) and lower infrastructure costs appear to be having a positive impact on supply.
“Further reforms to fast-track approvals as well as accelerated Environment Protection and Biodiversity Conservation (EPBC) decisions and further planning reforms could further increase supply.
“Australia will likely fall well short of the goal of 1.2 million new homes, but policy levers are starting to move in the right direction in many states,” concluded Mr Reardon.
This month’s increase in new home sales nationally was driven by all states, led by a 34.8 per cent increase in Victoria. New South Wales trailed closely behind with a 34.4 per cent monthly increase, followed by Queensland (+25.0 per cent), Western Australia (+14.2 per cent) and South Australia (+7.5 per cent).
Private New House Sales - Australia (seasonally adjusted)
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