New homes sales in NSW remain at depressed levels, despite a 9.4 per cent increase in May 2023 compared to the previous month and a three-month bump of 4.4 per cent compared to the previous quarter.

However, overall sales in the three months to May 2023 were down a whopping 63.3 per cent compared with the previous year.

These figures come from the Housing Industry Association (HIA), representing more than 60,000 individuals in the housing industry, which surveyed its largest home builders by volume.

The downward trend indicates slow house sales will continue for at least another year to its lowest point in a decade, according to HIA.

The biggest factor was The Reserve Bank of Australia’s increase to the cash rate, which has risen by four points in 2023 alone. HIA senior economist Tom Devitt said finance is becoming unobtainable for more buyers.

“The significant increase in the cost of land and construction across all jurisdictions over the past two years is compounding the impact of higher interest rates,” says Mr Devitt.

 “The additional costs of compliance with the National Construction Code, that come into effect this year, will further increase the cost of new home construction and dampen demand further.”

NSW saw the biggest sales contraction compared to other states due to its heightened sensitivity to changes in the cash rate. The only state that saw an increase in the number of houses sold was Western Australia, growing 19.4 per cent in the three months to May 2023.