New home sales take an autumn dip

New home sales in April were more than 50 per cent lower than they were in March, according to the HIA.

The announcement:

“New Home Sales fell in April 2021 to be 54.4 per cent lower than March as HomeBuilder came to an end,” stated HIA’s Economist, Angela Lillicrap.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.

“This sales result for April 2021 is an encouragingly strong result. It suggests that there is a significant volume of new homes to be built for customers not eligible for HomeBuilder,” added Ms Lillicrap.

“Despite being well below recent peaks, sales in April 2021 are just 2.7 per cent lower than the average month prior to the COVID shock.

“There is an unprecedented volume of building starts set to occur in 2021. HomeBuilder and lower interest rates have facilitated in a surge in demand for detached homes that ensures a record number of new detached homes will be built this year and into 2022.

“A cooling in sales is to be expected as the grants available through the HomeBuilder program came to an end in March.

“The housing market in 2020 was heavily impacted by COVID-19, experiencing both record highs and record lows. As a result, in this edition of New Home Sales we are also comparing sales in 2021 to 2019, which is considered to be a “normal” year.

“The demographic shift in population towards regional locations and low interest rates will continue to drive demand for new homes over the months to come, albeit at a level well below recent peaks,” concluded Ms Lillicrap.

Sales in April 2021 declined across all the five largest jurisdictions compared to the previous month. South Australia declined by 71.7 per cent, followed by Queensland (-65.6 per cent) and Victoria (-65.4 per cent). New South Wales fell by 22.4 per cent and Western Australia fell by 15.2 per cent over the same period.

Sales in April 2021 were higher than their monthly average in 2019 in New South Wales (+30.3 per cent) and Western Australia (+27.5 per cent). The remaining states declined over the same period – Queensland (-4.8 per cent), South Australia (-13.4 per cent) and Victoria (-26.5 per cent).

Source: Housing Industry Association (HIA)

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