There was a substantial slowdown in the take-up of new homes across major states — save for Western Australia — in July, according to the latest report from the Housing Industry Association (HIA).

Overall, new home sales declined by 20.5% over the month.

HIA economist Tom Devitt said the episodes of lockdowns that happened across the country was a major drag to demand during the month.

"With lockdowns in multiple states restricting trade and eroding confidence, it is not surprising that fewer people were able to visit display homes," Mr Devitt said.

Over the month, only WA witnessed a growth in new home sales at 8.5%.

On the other hand, significant declines were recorded in Victoria (32.2%), South Australia (29.4%), Queensland (25.4%), and NSW (14.8%).

However, on a three-month basis, sales for new homes remained solid, albeit still marginally lower than last year which was supported by HomeBuilder.

It’s also worth noting that new home sales during the quarter to July was 4.3% higher than during the same time in 2018, which was considered a strong year for home building.

"This solid level of sales following the end of HomeBuilder suggests that demand for detached housing remains robust despite the poor result in July,” Mr Devitt said.

“Low interest rates and changes in consumer preference for location of housing have been the major drivers for activity following the end of HomeBuilder.”

During the three-month period, WA, New South Wales, and Victoria all reported higher sales of new homes, up by 34%, 12.5%, and 10.9%, respectively.

The numbers, however, were still down in South Australia and Queensland, which posted respective three-month sales declines of 11.5% and 30.2%.