New home sales held up better than many expected in April, rising 4.9% over the month despite three consecutive interest rate hikes and mounting economic uncertainty. But industry leaders are sounding a cautious note: the conditions that supported that resilience may not hold through the middle of 2026, realestate.com.au reported.
The Housing Industry Association's monthly New Home Sales report — compiled from the country's largest volume builders across the five most populous states — showed sales in the three months to April running 4.6% ahead of the previous quarter.
Victoria led the charge with a monthly surge of 20.9%, followed by South Australia at 11.5%. Queensland, New South Wales, and Western Australia all recorded declines of 14.9%, 3.1% and 1% respectively.
The national picture, however, remains constructive. ABS figures show private sector house approvals rose to their highest level since November 2021 in March, with 10,194 dwellings approved nationally, up 12% year-on-year.
HIA chief economist Tim Reardon described the month as a "solid result," attributing the continued appetite for new builds to underlying structural forces rather than short-term sentiment. Even with borrowing costs rising, he argued, population growth and unemployment are continuing to underpin demand for housing.
"These fundamentals suggest that, while interest rates are an important factor, they will not materially alter the underlying need for new homes," Reardon said.
He was careful to flag, however, that some of April's strength may reflect momentum built up before the economic picture darkened — and that the coming months will be a clearer signal of where buyer confidence actually stands.
The federal budget's changes to negative gearing and the capital gains tax discount add another layer of complexity. Although new builds retain their exemption from both measures, Reardon warned that even a partial pullback from investors — who represent a meaningful share of new home demand — could further tighten an already constrained supply pipeline.
"Given investors account for a significant share of new home building, any pullback could see even greater constraints on housing supply moving forward," he said.
Despite those headwinds, Australia's largest builders say they are not yet seeing a collapse in buyer intent.
Metricon CEO Brad Duggan said the builder's own April performance ran well ahead of the HIA average, noting that buyers are taking a more deliberate approach — assessing the full picture of borrowing costs, construction pricing and policy settings before signing contracts. His outlook for the next quarter is measured.
"Our expectation is cautiously optimistic,” Duggan said. “While the recent impacts of the Middle East crisis, three interest rate rises this year, and significant changes from the federal budget are all assaults on customer confidence, we have been very happy with the resilience we have seen among our customers in the current environment."
Both Duggan and NEX Building Group — parent of McDonald Jones Homes and Mojo Homes — pointed to government action on land supply and approvals as the most direct lever available to support the new home market.
Duggan called for faster delivery of land, infrastructure, and development approvals, while NEX highlighted the development application process specifically, noting that streamlining DA approvals for land developments alongside building approvals would meaningfully reduce both time and cost. NEX currently has a joint initiative underway with Newcastle Council aimed at doing exactly that.
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