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“Lending for new homes is down by 62.4 per cent since its peak in January 2021, to its lowest level since November 2012,” added Mr Reardon.
“Sales of new homes have stalled in recent months as market confidence declines.
“This poor data is as a consequence of the fastest increase in the cash rate in a generation. Despite this, the impact of last year’s rate increases won’t be fully apparent until late this year.
“The decision by the RBA to increase rates further in 2023, will further erode market confidence and accelerate the downturn that is already evident.
“There are significant lags between a change in the cash rate and its impact on the economy. In this cycle, it will take up to 18 months before the impact of the May 2022 rate increase fully flows through to employment in the sector.
“The supply chain disruptions of the pandemic are easing. Inflation in other economies is slowing and interest rates are not the only tool at governments’ disposal to address the inflationary problem,” concluded Mr Reardon.
Despite the nation falling behind in its housing targets, the Federal Government has left apprentices and employers in limbo with uncertainty of funding beyond Christmas, says the Housing Industry Association (HIA).
“Home renovation activity nears record high, boosted by rising home prices and low unemployment,” stated Tim Reardon, HIA Chief Economist.
“Today is a great day for the housing industry in NSW with passage of the Planning System Reforms Bill 2025 through parliament,” said Brad Armitage, HIA NSW Executive Director.
Starting 1 July 2026, domestic building insurance (DBI) will only be available through the Building and Plumbing Commission (BPC), which has replaced the VMIA in providing this product.