New Home Sales Steady

Housing Industry Association numbers show home builds hold after recent volatility.

The most recent HIA New Home Sales report, a monthly survey of the largest volume home builders in the five largest states, is a leading indicator of future trends in the residential building industry.

“New Home Sales and Housing Finance data indicate that the housing market has stabilised over the past six months,” said HIA economist Angela Lillicrap.

“New home sales remained steady in the three months to October compared to the previous three months and are now only 3.1 per cent lower than this time last year when the market began to cool.

“At this time last year, the market for new homes was cooling rapidly. Sales have now returned to levels similar to this time last year.

With other indicators like the Australian Bureau of Statistics housing finance data also suggesting stabilisation in the market, Ms Lillicrap said it appears the bottom of this cycle occurred in April this year, with signs of improvement since then.

“There are no indications that new home sales are returning to the levels experienced in the boom years of 2015 to 2017,” she said. “But the improvement over the past six months suggests that this downturn will not be deep, in comparison to previous cycles.

“Wider economic conditions remain positive, just not as buoyant as the market has come to expect.

“Exports are continuing to exceed all forecasts, unemployment remains stable and the number of people participating in the labour market has been growing which is an indicator of a healthy labour market.”

Across the country, new home sales were relatively flat in Western Australia with no growth, Victoria went backwards at -1.2 per cent, as did South Australia showing -1.0 per cent decline compared to the previous three-month period.

Queensland increased by 5.7 per cent while New South Wales down by 4.9 per cent since October 2019.