Despite the increases in interest rates and the rapid increase in building costs, new home sales increased in June.
The HIA New Home Sales report – a monthly survey of Australia’s largest volume home builders – shows that sales of new homes grew by 1.9% in June compared to the previous month.
The increase puts sales in the June quarter higher by 11.1% compared to the same quarter last year.
Queensland and Victoria drove the national increase in June, with sales in these states increasing by 6.7% and 4.2% respectively. New South Wales was stable in the month, while falls were reported in Western Australia (down 1.5%) and South Australia (11.0%).
For the three months to June 2022, compared to the same quarter in the previous year, sales in Queensland were up by 40.9%, followed by Victoria (15.7%) and South Australia (11.8%). Declines were seen over this period in New South Wales (down 1.9%) and Western Australia (8.1%).
HIA economist Thomas Devitt said that there is a record number of homes currently under construction, a large number of projects approved but not commenced and strong sales to the end of June.
“This will ensure that home building activity and demand for skilled workers will remain strong throughout 2023”, he added.
“Those households purchasing a home in June likely began the process before the first cash rate increase in May.
“The rapid increase in the cost of building a new home will be compounded by the adverse impact of the rise in borrowing costs.
“The industry is noticing a slowing in the number of groups visiting display sites in recent weeks which could result in fewer new home sales in the second half of 2022”, Devitt concluded.
