Buyers appear to be rejecting newly-built homes.
Sales of new homes fell 10 per cent nationally in August and were 19.3 per cent lower in the three months to August compared with the previous quarter, according to new data from the Housing Industry Association.
Victoria recorded the sharpest quarterly decline, with sales down 27 per cent, followed by Queensland at 20.2 per cent, NSW at 17.5 per cent, South Australia at 10.8 per cent and Western Australia at 8.2 per cent.
HIA chief economist Tim Reardon said the deterioration meant the recovery in new home building seen earlier this year had been interrupted.
Independent property economist Cameron Kusher told SBS News that a combination of higher borrowing costs and low confidence was making it increasingly difficult to buy a new home.
Tim Lawless, the research director at property data firm Cotality, said the slowdown was also evident across the broader property market, although new homes appeared to have been hit harder.
"It does look like new home sales have been hit a little bit harder," Lawless said, pointing to higher interest rates, weaker confidence, reduced investment and affordability and serviceability constraints.
The slowdown has been pronounced in Sydney, Brisbane and Perth, where Cotality estimates home sales fell by more than 20 per cent over winter compared with the same period last year.
In 2024 the National Housing Accord started with an aspirational target of 1.2 million new, well-located homes over the five years to June 2029.