New homes sales are on the rise following an 8.8% increase in October according to the Housing Industry Association (HIA). The HIA says the lift was largely driven by an increase in sales across New South Wales, Victoria, and Queensland.

HIA economist Maurice Tapang says the increase comes as building material cost increases have eased. He says the latest figures, show the market most likely moved through its trough in mid-2024. The number of loans issued for new home purchases and construction during the September 2024 quarter rose by 14.3% compared with the same time in 2023.

The HIA’s latest Housing Scorecard shows home buying activity is strongest in Queensland and is being driven by population flows from overseas and interstate. “Following Queensland in these rankings are Western Australia and South Australia, where there is strong ongoing demand for building new homes. Exceptionally low unemployment rate, strong population growth and stable interest rates have sustained the key dynamics necessary for strong demand for new home building,” he says.

At the same time spending on renovations is increasing. Analysis by KPMG shows renovation spending is up by 6.5% in the past five years and now accounts for 40% of total residential construction expenditure.