Latest figures from the Housing Industry Association (HIA) suggest that the market cooled in 2017. The HIA’s New Homes Sales Report – a survey of Australia’s largest home builders – has logged a fall in the number of new homes sold last year.
Data showed that new home sales in November 2017 were 6% lower than the same month a year before, with building approvals also down by 2.1%.
Nevertheless, HIA principal economist Tim Reardon believes the industry remains at relatively high levels of activity. “This is a smaller down-turn than we anticipated and bodes well in terms of the likelihood of a modest and orderly reduction in new house building,” he said in a statement.
Reardon pointed out that the figures are not consistent across the country. In Victoria, an expected slowdown in building has yet to materialise. New home sales there rose by an annualised 6.3% last November. Approvals rose by a further 8.7% in the three months to November compared with the same period in 2016.
Results were gloomier in Western Australia – the new financial year brought even lower results as more restrictive first home buyer policies were implemented.
“We do not anticipate that the market will grow in 2018. In fact, we expect that the market will continue to cool as subdued wage pressures, lower economic growth and constraints on investors result in the new building activity transitioning back to more sustainable levels by the end of 2018,” said Reardon.
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