Sales of new homes remained low in October, according to a monthly survey of Australia’s home builders.
The latest HIA New Home Sales report shows that sales of new homes fell back in October, to be down by 8.1% for the month.
HIA Senior Economist Tom Devitt noted that the spike in sales that emerged in September, caused by regulatory changes in NSW, was more than reversed in October.
“Buyers rushed to get ahead of NSW regulations that will add significantly to the cost of a new home, causing an extraordinary spike in sales in the state in September”, Devitt said, adding that this drawing forward of home purchasing decisions is likely to continue weighing on sales over coming months.
“The sales performance in October was consistent with the weakness observed throughout 2023 and will see new house starts continue to decline.”
Devitt suggests a combination of higher interest rates, record population growth and acute rental shortages reflect the need for a strong pipeline of new housing supply.
“Increasing the supply of homes will require policymakers to help lower the cost of building. This means reforms to tax, land release and planning, and loosening macro-prudential rules that squeeze out owner-occupiers and investors alike”, Devitt concluded.
In the three months to October, new home sales across Australia fell by 5.8% compared to the same quarter in the previous year.
Sales were down in 20.1% in South Australia, 17.4 in New South Wales, 15.0% in Queensland and 13.8% in Victoria. Sales in Western Australia increased by 42.2% compared to the same three-month period in 2022.
