New home sales rise 11 per cent year-on-year, driven by Queensland and South Australia

New home sales in Australia have increased by 11.1 per cent in the three months to July 2024 compared to the same period last year, according to the latest HIA New Home Sales report.

HIA Economist Maurice Tapang said the figures suggest a pickup in detached home building for the second half of 2024, despite a marginal 4.1 per cent monthly decline in July.

“This is consistent with our expectations that detached home building will pick up pace in the second half of 2024,” Mr Tapang said.

Queensland led the growth, with new home sales surging 15.6 per cent in July compared to the previous month. The state’s sales over the past three months were 60.1 per cent higher than the same period last year.

South Australia also showed strong growth, with sales up 55.8 per cent in the three months to July 2024 compared to the previous year, despite a monthly decline.

Western Australia’s new home sales remained elevated, although recent months have seen a fall. Mr Tapang noted this market is constrained by industry capacity rather than demand.

However, New South Wales and Victoria continued to struggle, with sales “bouncing along the bottom of their respective cycles,” according to Mr Tapang.

“The rise in interest rates hurts these markets, particularly in Sydney and Melbourne, more significantly due to the higher costs of land,” he said.

The report indicates that improved home construction commencements across Australia will likely be driven by smaller markets outside Sydney and Melbourne.

New South Wales recorded a 17.5 per cent increase in the three-month period to July 2024 compared to the previous year, while Victoria experienced a 13.3 per cent decline.

The HIA New Home Sales report, a monthly survey of Australia’s largest volume home builders in the five largest states, is considered a leading indicator of future detached home construction.