New home sales solid in July

Demand for new houses remains solid, according to a regular survey of Australia’s home builders.

The latest HIA New Home Sales report shows that new home sales fell by 20.5 per cent in July, with declines reported in most states.

Despite the poor result in July, sales for the three months to the end of July were only marginally lower than at the same time in 2020 when the first positive impacts of HomeBuilder were emerging.

Sales for the three months also remain 4.3 per cent higher than at the same time in 2018, which was a relatively solid year for home building.

HIA Economist Tom Devitt remarked that with lockdowns in multiple states restricting trade and eroding confidence, it is not surprising that fewer people were able to visit display homes.

“This solid level of sales suggests that demand for detached housing remains robust despite the poor result in July.

“Low interest rates and changes in consumer preference for location of housing have been the major drivers for activity following the end of HomeBuilder”, Devitt said, adding that there is now a record number of homes under construction across the country.

Western Australia was the only state to see an increase in new home sales for the month of July, up by 8.5 per cent. This was accompanied by falls in New South Wales (down 14.8 per cent), Queensland (25.4 per cent), South Australia (29.4 per cent) and Victoria (32.2 per cent).

States performed much better when comparing the last three months to the same period in 2018. Western Australia was up by 34.0 per cent, followed by New South Wales (up 12.5 per cent), Victoria (up 10.9 per cent), South Australia (down 11.5 per cent) and Queensland (down 30.2 per cent).