New home sales fell for the first time in five months in May and may have peaked for the cycle, according to the Housing Industry Association.
Sales fell by 4.3 per cent in the month, a survey of Australia's largest volume builders found.
But sales rose by 3.8 per cent in the three months to May and were 21 per cent higher than the same period in 2013.
HIA chief economist Harley Dale said further upward momentum could be a challenge and called for more focus on inadequate land supply.
"The volume of new home sales nevertheless remains consistent with further growth in detached house building and the continuation of historically elevated levels of multi-unit construction," Mr Dale said.
Detached house sales fell by 2.2 per cent in May, while sales of multi-units dropped 16.1 per cent.
In the month, detached house sales rose by 3.3 per cent in Victoria and 0.5 per cent in Queensland, but fell by 6.7 per cent in Western Australia, 5.8 per cent in South Australia and 5.4 per cent in NSW.