New home sales crunch begins

New home sales fall

New home sales had been on a pretty solid run up until April 2026, but fell for a third consecutive month in July, as the new tax setting begin to bite on sentiment.

Source: HIA

New home sales appear likely to drop sharply over the next couple of years as market sentiment has tanked.

Mirvac and Stockland also reported this week that new home enquiries have slumped over recent months, with fewer new homes expected to built ahead.

In the short term, there's quite a pipeline of homes to be completed, but over the medium term, it looks like the crunch is underway.

Reported the Housing Industry Association:

“Households continue to face the cumulative impact of three interest rate increases this year. At the same time, uncertainty surrounding recent housing policy changes has encouraged many prospective purchasers to delay, or cancel, major financial decisions.

“In the three months to July, house prices nationally declined by 2.0 per cent, the largest quarterly fall since 2022. Because the new and established home markets are linked, a decline in established prices will lead a decline in new home sales and a slowing in home building. 

“The adverse shock to established home prices, due to the Federal Budget, is likely to be one factor slowing sales of new homes."

You can read the HIA media release here. 

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