New home sales on track for an end-of-year boost
According to the Housing Industry Association’s monthly analysis, new home sales held steady during the month of August.
While sales dropped back a marginal 1.3 per cent month-over-month, this year’s figures are ultimately improving on that of 2023, with sales over the three months to August up 4.6 per cent on this time last year.
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But the interest in new homes is far from evenly distributed – Queensland was the biggest contributor of the increase, and served to outweigh flagging numbers in other states.
In the sunshine state, new home sales were 53.5 per cent higher in the three months to August 2024 than the same period last year. Over the month, they ticked up by 3.8 per cent in August, off the back of a 15.6 per cent increase in July.
By comparison, Western Australia recorded a 14.2 per cent decline over the same period, followed by Victoria, where new home sales receded by 11.3 per cent.
HIA economist Maurice Tapang credited the above-average result in Australia’s northeast to continued population growth driving interest in building.
And while sales of new homes in South Australia and Western Australia fell in the month of August, Tapang noted that they had been maintaining “strong levels” for some time.
“It is possible that investor activity in Western Australia is slowing down as it moves through a cycle of strong house price growth and low vacancy rates,” he said.
In NSW, meanwhile, he speculated that regulatory changes and land prices were serving to dampen interest in home construction, with the cost of a new house and land package particularly high in the Greater Sydney area.
Victoria is still feeling the effects of regulatory changes as well, with a boost of new contracts executed in April to avoid meeting new energy efficiency standards giving way to subdued sales in the months that have followed.
Despite the uneven results across the country, Tapang said that the nation appeared on track for continued momentum in the new home market.
“It has been more than ten months since the last rate increase. The continued undersupply of homes and robust labour market conditions are assisting a return of consumers to the new home market.
“It is increasingly evident that an increase in home building activity, expected towards the end of this year and into early next year, will be driven by those markets outside of Sydney and Melbourne,” he said.