Australian housing developers are resorting to discounts, gift cards and help with mortgage payments to compete for dwindling buyers as home sales slow.

Stockland, Australia's biggest listed home builder, is giving rebates and gift cards of as much as $30,000 at projects in Victoria, Queensland and New South Wales states. Devine is matching deposits in South Australia and taking over mortgage payments for as long as a year in Melbourne. Peet has been offering discounts of as much as $50,000 in Western Australia, Queensland and Victoria.

The sluggish outlook for residential construction has builders competing hard for a dwindling number of buyers. Credit:Glenn Hunt

Reserve Bank interest rate cuts of 1.75 percentage points since November 2011 have failed to spur housing demand amid slowing job growth. New home sales in December were 6.6 per cent below the level of a year earlier, and loan approvals to build or buy new homes the same month were 31 per cent below an October 2009 peak.

“The discounts this time 'round are bigger than we've seen before because the response we've seen to rate cuts has been far more muted,” said Stuart Cartledge, managing director of Melbourne-based Phoenix Portfolios, part-owned by Cromwell Property Group. “Affordability based on mortgage costs has improved, but people are worried about losing their jobs. House buyer confidence isn't there.”