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National new home sales during October rose by 8.8 per cent on the previous month, largely driven by an increase in sales across NSW, Victoria, and Queensland, according to the latest New Home Sales report released by the Housing Industry Association (HIA).
HIA economist Maurice Tapang said that the increase in sales in October continued a “trend that is increasingly evident in most markets across Australia”.
“This month’s strong increase in sales comes as unemployment remained at exceptionally low levels, interest rates remained unchanged for over a year and prices of home building materials stabilised,” he said.
“Other indicators of future home building activity show a consistent story, suggesting that the new home market nationally has already reached the trough in this cycle sometime in mid-2024.”
The number of loans issued for new home purchases and construction during the September quarter of 2024 rose by 14.3 per cent when compared to the same period in 2023, with approvals data showing the number of detached homes approved during the quarter rose by 13.1 per cent, according to Tapang.
“As anticipated however, the synchronisation of building cycles across all states and territories that was evident through the pandemic is no longer evident, with state government policies increasingly determining the length and depth of market downturns,” Tapang said.
“The depth of the trough in and subsequent rise in new home sales varies across the different states, affected by factors including the cost of residential land.”
The report found that the flowthrough of new housing approvals and commencements in Western Australia has continued after being the first market to see an increase in sales during 2023.
However, sales in the three months to October 2024 saw a decline in Western Australia of 27.8 per cent, followed by NSW (19.7 per cent) and Victoria (6 per cent).
“Queensland and South Australia have started to see an increase in sales this year, which is flowing through to approvals data,” Tapang said.
“Sales in Victoria appear to be slowly increasing, albeit off a very low base. This month, Victoria saw the strongest monthly rise in new home sales, up by 26.5 per cent compared to the previous month.
“If this trend continues, New South Wales will be the only laggard market for home building activity. This is driven by the high cost of residential land, particularly in Greater Sydney.”
Year on year, national new home sales rose by 8 per cent, with the rise in new home sales expected to see an increase in house commencements from early 2025, Tapang said.
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