New home sales surge in January: a promising start to 2025

New home sales have picked up momentum across Australia in January 2025, rising by 4.1 per cent as builders in NSW, South Australia, and Queensland lead the way. The latest report from the Housing Industry Association (HIA) comes on the back of slower sales during November and December 2024, signalling a potential turnaround in the market.

Key Highlights

• Nationwide Growth:
  The HIA New Home Sales Report reveals a 4.1 per cent increase in new home sales over the past three months compared to the previous year. This improvement suggests that the market is rebounding from the late-year slump.
• State-Specific Trends:
  • NSW: Dominating the charts, NSW experienced a staggering 70.5 per cent jump in sales over the three-month period.
  • South Australia: Saw a solid 22.3 per cent increase, reflecting growing buyer interest.
  • Queensland: Sales in Queensland climbed by 12.3 per cent, contributing to the overall national uplift.
  • Victoria & Western Australia: While Victoria remained relatively flat with a marginal decline of 0.5 per cent, Western Australia struggled with a 26.1 per cent drop, mainly due to capacity and labour shortages.

What It Means for the Market

HIA economist Maurice Tapang noted that the overall boost in sales, recorded before the cash rate cut in February, is likely to bolster market confidence further. Tapang highlighted that the uptick is occurring despite a persistent shortage of housing stock and very low unemployment levels.

He remarked, “The recent rise in new home sales reflects a growing appetite among buyers, particularly in markets where new detached homes remain relatively more affordable compared to the steep prices in Sydney and Melbourne.”

Furthermore, Tapang pointed out that the report is an essential indicator for future detached home construction, with approvals for new detached houses up by 6.8 per cent compared to 2023. This suggests that the surge in buyer interest is expected to translate into more homes hitting the market later this year.

A Bright Outlook

The HIA data not only demonstrates an encouraging start to 2025 but also hints at a more robust construction pipeline for the remainder of the year. As builders adjust to market conditions and potentially benefit from further rate cuts, the industry could see a sustained period of growth, helping to address Australia’s ongoing housing shortage.

With this positive momentum, buyers and investors alike may have reason to be optimistic about the future of Australia’s new home market.