A rise in the sale of new homes is the latest among a series of indicators showing an improvement in housing market conditions.
The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is considered a leading indicator of future trends in the residential building industry.
HIA economist Diwa Hopkins says the residential building industry can be optimistic that activity will stabilise in 2020 after sustaining two years of fairly sharp declines.
New home sales in the three months to November 2019 were 2.8% higher than the previous quarter – although still 5.7% lower than in the same period a year earlier.
The improvement in sales of new homes is occurring alongside increases in home lending and a return to growth in housing prices in most markets, both in the capital cities and in regional areas. Vacancy rates remain low in many parts of the country.
“The withdrawal of APRA’s counter-cyclical regulatory interventions, followed by a fresh round of cuts to the official interest rate, were among measures which arrested previously-deteriorating market conditions,” says Hopkins.
“Add to that federal income tax cuts and then the government issuing its first tranche of first home loan deposit guarantees, and a growing number of households previously sitting on the margins of the housing market are finding they can now enter.”
Across the country, private detached house sales in the three months to November 2019 were higher than in the previous three months in Western Australia (+14.4%), Queensland (+2.0%) and Victoria (+1.6%). Detached house sales in New South Wales dropped marginally (0.5%).
Stockland’s chief executive officer of communities, Andrew Whitson, says the developer is seeing strong buying in Sydney. “Recently, we’ve seen strong demand at our projects in Sydney, particularly for homes in the more affordable price brackets, with our latest releases selling out in one day,” he says.
Iwan Sunito, Crown Group chairman and chief executive officer, says the multi-unit sectors area also showing early signs of recovery.
“Across the 2019 calendar year, we saw the market improve, with our apartment sales growing month-on-month since January to reach $44 million in the spring season of 2019,” he says. “We expect to see prices continue to grow exponentially in 2020.”
