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New Home Sales declined by 20.5 per cent in July compared to the previous month as lockdowns impair sales activity. Sales declined in every major state except Western Australia.
Lockdowns in New South Wales and Victoria were a major weight on New Home Sales activity. With restrictions imposed in many major markets, it is not surprising that fewer people went out shopping for a new home.
Despite this poor result in July, sales for the three months are 4.3 per cent higher than at the same time in 2018. This solid level of sales following the end of HomeBuilder suggests that demand for detached housing remains robust.
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 these 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. There is now a record number of homes under construction across the country.
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. This was accompanied by declines in New South Wales (-14.8 per cent), Queensland (-25.4 per cent), South Australia (-29.4 per cent) and Victoria (-32.2 per cent).
States performed much better when comparing the last three months to the same period in 2018. Western Australia was up by 34.0 per cent, followed by New South Wales (+12.5 per cent), Victoria (+10.9 per cent), South Australia (-11.5 per cent) and Queensland (-30.2 per cent).
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