Housing Shortage Continues

Housing Shortage Continues

Despite a small increase in September, new home sales are at the lowest quarterly level in 18 months, according to the Housing Industry Association.

New home sales increased by 3.4% over the month, but are down 17.5% in the September quarter, according to the HIA New Home Sales report which surveys Australia’s largest volume home builders.

HIA chief economist Tim Reardon says new home sales are well below the same time last year.

“This deterioration has occurred amid higher interest rates, increased taxes and broader economic uncertainty,” he says.

“The modest increase in sales in September should not be mistaken for a turning point in the market. Industry feedback indicates that display village visits, enquiries, leads and conversions remain very weak.”

The rate of cancellations of new home contracts is also up slightly, according to the HIA.

Reardon says this is typical when interest rates are rising, as home buyers who had conditional finance to build a new home have that finance removed.

The largest decline in new home sales is in Queensland (-26.3%), followed by Victoria (-23.3%), NSW (-17.4%), South Australia (-7.6%) and Western Australia (-1.7%).