Sales of new homes continue to drop, according to a monthly survey of Australia’s largest builders.
The latest figures show that new home sales fell by 7.0% in February, following an 8.3% decline in January. Despite that, sales in the three months to February were up by 11.5% on the previous period.
All of the big states saw declines in February, except Western Australia, which bounced back from its January low.
Over the three months ending February 2022, sales in New South Wales increased in the three months to be 22.7% higher than in the previous period. This was followed by Victoria (up 20.5%), Queensland (16.1%), and South Australia (8.8%). Western Australia saw the only quarterly decline, down by 22.0%.
HIA Economist Tom Devitt noted that the declines in the first two months of 2022 follow an exceptionally strong performance in the final months of 2021.
“It is likely that the Omicron outbreak and extended holidays have tempered sales in these months”, he suggested, adding that it is also possible that sales are moderating since the post-Delta surge that emerged in the final months of 2021.
“However, monthly variation can be significant in New Home Sales and it is too soon to draw conclusions from two months of data”, he said.
Sales in 12 months to the end of February were just 2.6% lower than in the previous year.
“The volume of work under construction and approved but not yet commenced remains at record highs and will continue to keep builders busy across Australia, supporting strong levels of employment into 2023”, Devitt said.
“Even as borders re-open and the functioning of supply chains improves, the salient constraint on builders this year will continue to be the availability of land, labour and materials.
“Shortages of shovel-ready land is especially likely to weigh on new home sales in the coming months as the pool of available land has been exhausted”, he concluded.
