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$vuetify.icons.faPhone1300 650 620

Sales of new homes continue to fall in March

Media release

Sales of new homes continue to fall in March

Media release
“Sales of new homes across Australia fell by a further 7.2 per cent in March compared to the previous month as the rise in the cash rate over the past year continues to impede sales,” stated HIA Senior Economist, Tom Devitt.

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.

“The latest decline leaves sales in the first three months of the year down by 45.9 per cent compared to the same quarter last year,” added Mr Devitt.

“Compounding the decline in sales is the rise in projects being cancelled.

“The cancellation rate increased in March to 30.5 per cent. This means for every three new building contracts that are signed, one sale from a previous month is cancelled. Many builders have reported ‘negative sales’ over recent months. The last time the rate was near this high was the start of the pandemic.

“The RBA’s rate increases last year and this year will continue to hold down new sales and cause further cancellations as finance becomes unobtainable for an increasing number of buyers.

“The significant increase in the cost of land and construction across all jurisdictions over the past two years is compounding the impact of higher interest rates. The additional costs of compliance with the National Construction Code, that come into effect this year, will further increase the cost of new home construction and dampen demand further.

“The combination of low sales volumes and rising cancellations of existing projects will hollow out the pipeline of building work over the coming months,” concluded Mr Devitt.

The largest declines in sales in March compared to the previous month were seen in Victoria (-23.4 per cent) and South Australia (-22.4 per cent), followed by Queensland (-2.2 per cent), while increases were seen in New South Wales (+1.7 per cent) and Western Australia (+22.5 per cent).

Over the last year, New South Wales has driven the declines, with sales in the first three months of 2023 down by 75.9 per cent on the same quarter last year. This was followed by Queensland (-54.3 per cent), Victoria (-43.4 per cent) and South Australia (-13.7 per cent). Western Australia was the only large state to see an increase over the last year, up by 1.0 per cent.

Private New House Sales - Australia (seasonally adjusted)

Source: HIA

For more information please contact:

Tim Reardon

HIA Chief Economist

Thomas Devitt

HIA Senior Economist
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