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NSW and QLD driving demand for new housing

The home building boom is in full swing in New South Wales, with sales of new detached homes the second-highest on record over the past three months.

According to the Housing Industry Association (HIA) New Home Sales report, sales of new detached homes are strong across the entire country, led by Queensland and NSW which saw increases of 46.3 per cent 33.7 per cent over the last quarter.

HIA Economist Tom Devitt said the impressive numbers suggest the building boom could carry on into next year.

“New home sales in the three months to January 2022 increased by 21.4 per cent on the previous quarter,” Mr Devitt said.

“Excluding the period associated with the HomeBuilder grant, which ended almost a year ago, this is the second strongest quarter of the last decade.

“The volume of sales in recent months is rarely seen outside of periods of government stimulus.

“Sales fell in January 2022 by 8.3 per cent compared to the previous month, yet this still represents one of the strongest months of the last decade.

“This ongoing demand suggests the current new home building boom will continue, supporting strong levels of employment into 2023.”

On a quarterly basis, sales in Queensland increased in the three months to January 2022 to be 46.3 per cent higher than the previous quarter.

This was followed by New South Wales (up 33.7 per cent), Victoria (up 28.5 per cent), and South Australia (up 3.4 per cent). Western Australia saw the only quarterly decline, down by 18.0 per cent.

Mr Devitt believes the end of lockdowns has contributed to the heightened demand, particularly in NSW.

“New South Wales has been the driving force behind new home sales, recording its second strongest month since 2004,” he said.

“The only month stronger was December 2020, associated with the end of the first phase of HomeBuilder.

“Sales in the last three months in New South Wales were even higher than the first quarter of 2021, which was associated with the end of the second phase of HomeBuilder.

“Sales in the other large states have also strengthened in recent months, consistent with the end of the Delta lockdowns and the return of some certainty and confidence to the market.

“Western Australia experienced a sharp decline in sales in January.

“This reflects the significant volume of work already in the pipeline and ongoing constraints on land, labour and materials, rather than a weakness in demand.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.

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