The turnover of new homes increased in April, indicating that sales have already levelled out and reached a floor.
Housing Industry Association (HIA)’s latest report covering the five largest states showed a 6.8% increase in new home sales in April.
Over the three-month period, sales of new homes stabilized, with Western Australia showing signs of growth at 9.8% compared to last year.
In fact, new home sales in the state over the period grew 40.3% compared to during the same period in 2019.
Across other states, sales were down particularly in New South Wales, which posted a 70.5% decline. Queensland, Victoria, and South Australia also recorded declines.
HIA chief economist Tim Reardon said the results suggest that sales may have levelled out and reached a floor.
“With sales relatively stable, albeit at extraordinarily low levels for six months, it does appear that the market has reached rock bottom,” he said.
However, cancellation rate remains a concern, with more than one new home project getting cancelled for each four new homes sold per month.
“This is its highest level since the start of the pandemic and is resulting in an accelerated decline in the pool of work sold, but not commenced,” Mr Reardon said.
“The RBA’s rate increases last year and this year will continue to hold down new home sales and cause further cancellations as finance becomes unobtainable for an increasing number of buyers.”
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