Sales down by the month but still on the rise annually
Report shows marginal decline of home sales in February across most states.
SALES of new homes declined last month but the silver lining was that they remained higher than the same period in 2025.
The Housing Industry Association 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.
HIA senior economist Maurice Tapang said: “New home sales fell by 20.3 per cent in February but remain 27.3 per cent higher than in the same quarter last year.”
“Nationally, sales over the three months to February were unchanged compared to the previous quarter and remain significantly higher than a year earlier,” added Tapang.
“This reflects a steady recovery in new home demand over the past year rather than a sharp cycle turning point.
“This result for February should be interpreted in the context of both volatility and timing. The decline follows a strong January result and coincides with a material shift in interest rate expectations. It is likely that both factors have contributed to the weaker outcome.”
Tapang said that policy uncertainty has increased with discussion around potential changes to capital gains tax and negative gearing possibly contributing to a decline in market confidence.
“Similar declines in sales occurred prior to the 2019 election, the last time that an increase in taxes on investors was debated.
“Despite the adverse impact of the rise in the cash rate, and talk of increasing the taxation imposts on housing, demand remains stable given low unemployment and strong population growth.
“This has seen tight rental markets pushing established home prices higher.
“The coming months will provide clearer evidence on how sensitive new home demand is to higher borrowing costs in the current environment,” Tapang said.
Western Australia was the only state to record a monthly increase in February, with a 13.2 per cent rise.
The largest decline was seen in South Australia (-32.0 per cent), followed by Queensland (-29.2 per cent), Victoria (-25.4 per cent) and NSW (-19.0 per cent).
