New home sales jumped in October, with an 8.8 per cent increase compared to September, signalling a potential recovery in the housing market.
According to the Housing Industry Association (HIA), the rise was primarily driven by increased sales in New South Wales, Victoria and Queensland, with Victoria seeing the strongest monthly gain of 26.5 per cent.
HIA Economist Maurice Tapang said the strong increase comes amid favourable market conditions.
“This month’s strong increase in sales comes as unemployment remained at exceptionally low levels, interest rates remained unchanged for over a year and prices of home building materials stabilised,” Mr Tapang said.
The recovery appears to be widespread, with multiple indicators showing positive signs. Housing finance data revealed a 14.3 per cent increase in loans for new home purchases in the September quarter compared to the previous year.
However, the market recovery is not uniform across all states.
Western Australia led the initial recovery in 2023, while Queensland and South Australia have seen increases this year.
Victoria’s market is showing signs of improvement, albeit from a low base, while New South Wales continues to lag due to high residential land costs.
South Australia experienced a temporary setback with an 18 per cent decline in October following changes to liveable housing and energy efficiency provisions.
The national trend remains positive, with sales over the past twelve months up 8 per cent compared to the previous year.
“New home sales nationally are showing an upward trend, with sales in the last twelve months 8.0 per cent higher compared to the previous year,” Mr Tapang said.
“The rise in new home sales will see an increase in house commencements from early 2025.”
