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New home sales plummet across Australia in July

The sale of new homes has dropped significantly in almost all Australian states, according to a new report that surveys the largest volume home builders.

The Housing Industry Association (HIA) New Home Sales Report showed new home sales fell 20.5 per cent in July, with declines seen in almost every state.

HIA Economist Tom Devitt revealed new home sales dropped 32.2 per cent in Victoria, 29.4 per cent in South Australia, 25.4 per cent in Queensland and 14.8 per cent in New South Wales.

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.

“With lockdowns in multiple states restricting trade and eroding confidence, it is not surprising that fewer people were able to visit display homes,” Mr Devitt said.

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

Mr Devitt noted sales for the past three months also remained 4.3 per cent higher than the same time in 2018, which he believed was a “solid year for home building”.

“This solid level of sales following the end of HomeBuilder suggests that demand for detached housing remains robust despite the poor result in July,” he said.

“Low interest rates and changes in consumer preference for location of housing have been the major drivers for activity following the end of HomeBuilder.

“Sales data over coming months will indicate if recent lockdowns have impaired consumer confidence or if this July result is an anomaly.

“ABS housing finance data and approvals data indicate that the bulk of projects initiated by HomeBuilder have cleared the final regulatory hurdles.”

The report showed states performed much better when comparing the past three months to the same period in 2018.

New home sales in Western Australia was up by 34 per cent, followed by New South Wales (12.5 per cent) and Victoria (10.9 per cent). South Australia and Queensland saw declines from 2018, 11.5 per cent and 30.2 per cent respectively.

Mr Devitt added there is currently a record number of homes under construction across the country, which could assist with future housing supply shortages.

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