Still crashing: New home sales hit new low

The HIA surveys the largest 100 home builders (which accounts for more than one-third of Australia’s new residential builds) in Australia on their sales volumes – or contracts to build – every month.

In May alone, new home sales fell by 4.3 per cent, and over the three months to May, sales were down by 20.3 per cent compared with the previous three months.

Commenting on the statistics, Mr Reardon said that after new home sales fell to their lowest level on record in March, figures across April and May dropped even further.

March, April and May sales were also down 18.2 per cent compared to the same period in 2019, which the HIA has said “was already at a pre-2019 federal election low”.

“The first signs of this contraction will flow through to work on the ground as early as July, before falling more significantly from September onwards,” the economist has predicted.

Project cancellations have also seen a sharp increase; Mr Reardon said that while rates typically sit around 7 to 9 per cent, they are now up at 26 per cent.

“This compared to a 17 per cent cancellation rate after the GFC,” the economist considered.

He applauded the announcement of the HomeBuilder program for its expected “arrest” against the fall in new home sales and the ability to improve market confidence, “not just in the home building sector but across the wider economy”.

“This will improve the outlook for employment in the sector in the second half of 2020 and into 2021.”