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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.
“Despite this decline over the past two months, sales in the three months to February were up by 11.5 per cent on the previous quarter,” added Mr Devitt.
“The declines in the first two months of 2022 follow an exceptionally strong performance in the final months of 2021.
“It is likely that the Omicron outbreak and extended holidays have tempered sales in these months. It is also possible that sales are moderating since the post-Delta surge that emerged in the final months of 2021. However, monthly variation can be significant in New Home Sales and it is too soon to draw conclusions from two months of data.
“Sales in 12 months to the end of February were just 2.6 per cent lower than in the previous year.
“The volume of work under construction and approved but not yet commenced remains at record highs and will continue to keep builders busy across Australia, supporting strong levels of employment into 2023.
“Even as borders re-open and the functioning of supply chains improves, the salient constraint on builders this year will continue to be the availability of land, labour and materials.
“Shortages of shovel-ready land is especially likely to weigh on new home sales in the coming months as the pool of available land has been exhausted,” concluded Mr Devitt.
All of the big states saw declines in February, except Western Australia, which bounced back from its January low.
On a quarterly basis, sales in New South Wales increased in the three months to February 2022 to be 22.7 per cent higher than the previous quarter. This was followed by Victoria (+20.5 per cent), Queensland (+16.1 per cent), and South Australia (+8.8 per cent). Western Australia saw the only quarterly decline, down by 22.0 per cent.
"A slow return of overseas migration is easing the adverse impact of a loss of workers from Australia’s two largest states,” stated Tim Reardon, HIA’s Chief Economist.
The Victorian Government has announced a further lifting of COVID-19 restrictions in relation to vaccination requirements.
The Certificate of Occupancy requirements for Class 1 buildings were suspended on 16 December 2021 to run until 30 June 2022.
This infosheet provides an overview of what cost plus contracts are, how they are used and how to avoid common issues. HIA has a Tasmania Cost Plus Contract for sale available for purchase through Contracts Online.