New home sales peak despite construction delays

According to the Housing Industry Association (HIA) New Home Sales Report, sales were much higher than pre-COVID levels in the three months leading up to November 2021.

HIA New Home Sales Report is a monthly survey of the top home builders in the five largest states that serves as an indicator of future single-detached home construction.

HIA economist Angela Lillicrap said the The high level of housing construction implies that the current boom will continue until 2022 and 2023.

“This is the fourth consecutive monthly increase and sales in the three months to November are 8% higher than the previous three months,” said Ms. Lillicrap.

She further explained how “demand for new single-family and multi-unit housing has remained strong even with the blockages. It seems that the more time people spend in confinement, the higher the demand for individual housing ”.

Looking more closely at the States, in the three months leading up to November 2021, sales in New South Wales were up 27.8% from the same period last year.

Meanwhile, other states saw sales decline, with Queensland and Victoria falling 8.6% and 15.2% respectively, also in the same time frame.

Western Australia and South Australia show a sharp decline, reaching 34.7% and 36.9% respectively compared to the same period in 2020.

Ms Lillicrap shed light on the sudden drop, stressing that “the constraint on housing construction is not demand but the availability of land, labor and materials”.

Digging deeper into the root cause of the problem, she felt that due to labor and material constraints, construction times had accelerated dramatically.

Under normal circumstances, an increase in shipments compared to the June 2021 quarter would have resulted from the boom in HomeBuilder projects. However, the completions, for the moment, have not yet been fulfilled.

“This resulted in the volume of work approved but not yet started at its highest level in over a decade,” Ms. Lillicrap concluded.

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Real estate

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New home sales peak despite construction delays



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Last updated: December 24, 2021

Posted: 22 December 2021