New home sales have risen 6.8 per cent, with industry experts hinting the market could be starting to rebound.
According to the latest Housing Industry Association (HIA) New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – the market has stablised.
“With sales relatively stable, albeit at extraordinarily low levels for six months, it does appear that the market has reached rock bottom,” HIA Chief Economist Tim Reardon said.
“This sees sales for the three months to April stable compared to the previous three months.
“This suggests that sales may have levelled out and reached a floor, barely more than half their levels from a year earlier.”
But Mr Reardon said the cancellation rate remained elevated, with more than one new home cancelled for each four new homes sold.
“This is its highest level since the start of the pandemic and is resulting in an accelerated decline in the pool of work sold, but not commenced,” he said.
“The RBA’s rate increases last year and this year will continue to hold down new home sales and cause further cancellations as finance becomes unobtainable for an increasing number of buyers.”
He said new home sales had fallening in all states in the the three months to April, except for Western Australia, which were up 37.1 per cent in the three months to April when compared to the previous three months.
Over the past year, new home sales are up 9.8 per cent in WA.
“Of note, sales in Western Australia in the three months to April 2023 were 40.3 per cent higher than at the same time in 2019,” Mr Reardon said.
“This is an encouraging sign that this market may defy the best efforts of the RBA.”
Over the past year, NSW has seen the largest declines, with sales in the April quarter down by 70.5 per cent on the same quarter in the previous year.
This was followed by Queensland (down 51.7 per cent), Victoria (down 46.3 per cent) and South Australia (down 13.7 per cent).