New home buyers rush to sign contracts in anticipation of NSW cost hike
Cost changes scheduled for 1 October caused an “extraordinary spike” in new home sales in NSW, as buyers raced to sign their contracts before the deadline.
The latest monthly Housing Industry Association (HIA) New Home Sales Report revealed a substantial 113.5 per cent jump in new home sales in the month of September, following nine months of far more moderate growth.
The report, which tracks purchases of new detached homes across five states, concluded that the upsurge was an anomaly caused by the NSW state government’s plan to increase regulatory costs after 30 September.
“Sales of new homes in NSW spiked in the month of September, more than double the volume of recent months, as buyers rush to get ahead of new regulations that will add significantly to the cost of a new home,” stated Simon Croft, chief executive of industry and policy at HIA.
“The NSW government has introduced a range of new regulatory costs that apply to homes for contracts signed after 30 September 2023. This has seen home buyers across NSW draw forward their purchasing decisions and sign new building contracts before these additional costs are imposed,” added Mr Croft.
The executive reiterated that “the strong sales in September are an aberration and it is expected that sales of new homes in NSW will fall away over the next few months”.
With the exception of the sale spike in NSW, sales of new home in Victoria, Queensland and South Australia declined to rates substantially below this time last year, in spite of a 6.9 per cent uptake compared to the national average in August. Across the country, new home sales in the three months leading up to September were 18 per cent lower on average than in mid-2022.
In Queensland, new home sales in the three months prior to September were -36.6 per cent lower than the same time last year, -25.3 per cent lower in Victoria, -22.2 per cent lower in NSW, and -12.4 per cent lower in South Australia.
The only state to witness an increase from last year was Western Australia, where new home sales increased 23.3 per cent compared to the same quarter in 2022.
Mr Croft warned that “increasing the supply of new homes will require governments to help lower the cost of building, not add additional taxes and regulations. As governments make new houses more expensive, fewer new homes will be built”.
He added that “meeting the appropriate levels of new housing for Australia’s current and future population will require changes to the other policies that inflate construction costs” like interest rates, tax settings, land release and planning reforms.
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