New work might be falling away right now, but the pipeline will keep Australia’s builders working well into next year, a new survey shows.
The latest HIA New Home Sales report shows that sales of new homes fell by 13.1% in the month of July.
HIA Chief Economist Tim Reardon attributes the downturn to the rise in the cost of borrowing, together with an increase in the cost of building a new home due to the constraints on global supply chains.
“The full impact of the rate increases will continue to flow through as an adverse impact on the sale of new homes for at least the next few months”, Reardon believes.
“This slowdown is consistent with reports from builders over recent months which have seen the number of people visiting display sites and making enquiries slowing since the first increase in the cash rate in May.”
It does not mean that work is likely to slow as well, however.
“There remains a significant volume of work under construction and approved-but-not-yet-commenced that will provide a buffer for the industry and ensure building activity and demand for skilled trades remains exceptionally strong through the rest of 2022 and into 2023”, Reardon says.
All of the major states saw a decline in new home sales in July, led by Queensland (down 15.5%) and New South Wales (15.3%), followed by Western Australia (13.5%), Victoria (11.1%) and South Australia (9.7%).
Compared to the same month in 2019, however, most of the states were still up, led by Queensland (up by a whopping 34.0%), Victoria (up 17.8%), New South Wales (12.8%), and Western Australia (8.2%). South Australia saw the only decline over this period, falling by 9.9%.
