Following on from a 13.1 percent decline in July, home sales across Australia have fallen a further 1.6 percent, according to the Housing Industry Association (HIA).
The Association’s latest HIA New Home Sales report, indicates the two month stretch from July to August are the weakest pair of months for new home sales since the lockdowns in 2021.
“Sales of new homes over the past two months are reflective of a slowing in the market as the impact of the rise in the cash rate hits households,” says HIA Economist Tom Devitt.
“This rise in borrowing costs compounds the impact of the rise in the cost of construction.
Devitt says the decline in sales is likely to improve in the near future.
“The full impact of recent and future rate increases will continue to flow through as an adverse impact on the sale of new homes in coming months,” he says.
“There remains a significant volume of work under construction and approved-but-not-yet-commenced that will provide a buffer for the industry and ensure building activity and demand for skilled trades remains exceptionally strong through the rest of 2022 and into 2023.
“The concern remains that the adverse impact of rising rates on the wider economy will be obscured by this volume of ongoing work and that the RBA goes too far, too soon.”
Victoria drove the declines in sales in August, down by 15.2 percent, followed by Queensland, with a decline of 1.8 percent. The other states saw increases compared to the month previous, including South Australia at 18.2 percent, New South Wales at 14.2 percent and Western Australia with a 7.5 percent increase.
