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{{propApi.successMessage}} {{region}} Change locationNew home sales in Victoria remain depressed
New home sales in Victoria remain depressed
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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.
“Despite a 12.4 per cent increase in the latest month, new home sales remain around the levels that were associated with Victoria’s deepest home building trough in over a decade,” added Mr Ryan.
“The recovery in new home sales that followed the interest rate reductions in 2025 has now reversed. This is particularly concerning to a Victorian industry that took so much longer than its interstate counterparts to begin recovering from its much deeper preceding trough.
“This deterioration has occurred amid higher interest rates, increased taxes and broader economic uncertainty.
“It is also likely that the increase in the cash rate in the month of September 2026 will further weigh on new home sales.
“Victoria’s state election later this year also approaches, a time when investors and owner occupiers alike tend to adopt a ‘wait and see’ attitude before committing to potentially the biggest financial decision of their life.
“The modest increase in sales in September should not be mistaken for a turning point in the market. Industry feedback indicates that display village visits, enquiries, leads and conversions remain very weak.
“There are significant lags between display village visits, the sale of a new home, building approval and the commencement of construction. The increase in new home sales during late 2025 and early 2026 created a pipeline of work that is only now appearing in the ABS building approvals and commencements data.
“The recent improvement in commencements is welcome, but it should not be mistaken for a sustained recovery.
“The deterioration in new home sales suggests that the improvement in home building activity will be short-lived unless market conditions improve.
“This is particularly concerning when Victoria commenced construction on just 57,550 homes in 2025/26, well below the 80,000 homes required annually to meet the target set by the Victorian Government.
“The underlying shortage of housing has not been resolved. Falling established home prices and rising costs of delivering new homes are making new construction increasingly difficult to justify.
“Putting the industry through another boom-bust cycle will only make it harder and more expensive to increase housing supply when market conditions recover.
“Higher interest rates will not build more homes. Nor will increasing the tax and regulatory burden on new housing.
“Without reforms that reduce the cost of delivering new homes, Victoria will continue to move further away from meeting its housing needs,” concluded Mr Ryan.
Victoria saw the second largest quarterly decline in new home sales (-23.3 per cent), behind only Queensland (-26.3 per cent) but a greater decline than New South Wales (-17.4 per cent), South Australia (-7.6 per cent) and Western Australia (-1.7 per cent).
Download our HIA New Home Sales Report
Private new home sales - Victoria
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