Data shows quarterly sales momentum continues, though supply constraints and tax changes cloud the outlook
New home sales in Australia rose 4.9% in April, according to the latest Housing Industry Association (HIA) New Home Sales report, which tracks the country's largest volume builders across the five most populous states.
"This is a solid result which sees sales in the three months to April 4.6% higher compared to the previous quarterly period," said Tim Reardon, HIA chief economist. "This outcome likely reflects the momentum carried over from late last year prior to recent rate increases, alongside strong growth in established house prices.
"Ongoing housing supply shortages have driven dwelling price growth in some markets and improved the feasibility of new home building. More broadly, demand for housing remains strong, underpinned by structural drivers."
At the state level, Victoria recorded the strongest monthly gain at 20.9%, followed by South Australia at 11.5%. Falls were recorded in Queensland (-14.9%), New South Wales (-3.1%) and Western Australia (-1%).
Private new house sales - Australia (seasonally adjusted) 
Source: HIA Economics
Reardon (pictured right) noted that strong population growth and low unemployment continue to sustain demand even in a higher interest rate environment. These fundamentals, he said, suggest that interest rates, while an important factor, will not materially alter the underlying need for new homes.
"However, the capacity to respond to this demand remains constrained," he added. "Labour shortages and elevated, rising construction costs are expected to persist through 2026, while access to shovel-ready land continues to limit the number of homes that can be delivered.
"The inability to unlock more shovel-ready land will continue to place upwards pressure on prices and limit the pace at which supply can increase."
Reardon warned that proposed changes to capital gains tax and negative gearing in the Federal Budget are likely to reduce investor participation. With investors accounting for a significant share of new home building, any pullback could further constrain housing supply.
"Emerging domestic and global uncertainty will pose risks to new home building, with the coming months providing clearer evidence of how sensitive demand is to the current environment," he said.
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