Sales of new homes lifted in February, a recent survey of Australia’s home builders has revealed.
The data shows that nationally, new home sales increased by 5.3 per cent in February 2024.
HIA Chief Economist Tim Reardon noted, however, that despite the increase, sales remain around the low levels prevalent in the second half of 2023.
“The slowdown in sales is caused primarily by the rise in the cash rate which has eroded the capacity of households to borrow and impaired market confidence”, he said.
Reardon expects that the slowing in sales and building approvals could flow through to a decade low volume of new houses commencing construction in 2024.
“The higher borrowing costs are compounding the elevated cost of land and construction, drying up the pipeline of new home building work despite the significant pent-up demand for housing”, he added.
The increase in sales in February was observed in most of the large states, led by Queensland (up by 8.4 per cent), followed by New South Wales (6.5 per cent), Victoria (6.3 per cent) and Western Australia (5.0 per cent). South Australia saw a 5.5 per cent decline in February.