New home sales defy HomeBuilder hangover

New home sales rose 5.8 per cent in August as conditions in NSW, Queensland and South Australia rebounded, shrugging off the post-HomeBuilder hangover, the latest Housing Industry Association figures show.

New home sales across the five mainland states rose to 4917 from 4646 in July, still below the incentive-fuelled 6483 average over the past 12 months but a sign that demand is holding up, the industry association said.

“New home sales remained strong in August, albeit not at the record levels observed prior to the end of HomeBuilder in March 2021,” HIA economist Tom Devitt said.

“The strength in new home sales in recent months indicates that the boom in detached home building will continue to create strong employment opportunities into the second half of 2022.”

Increased household savings during the pandemic and a deepening preference for lower-density homes were two factors driving demand, the HIA said.

The figures, based on survey responses from the HIA’s volume builder members, suggest the pandemic is keeping a floor under demand for detached homes, which offer residents more space to live and work, even if the trade-off is living further from sources of employment.

The growth in new dwellings is a welcome boost to new housing supply and it plays a part in keeping prices lower, although, as Reserve Bank assistant governor Luci Ellis said on Tuesday, it cannot eliminate the boom in prices being driven by record low rates that give people more money than ever to spend on housing.

Even so, the picture is not consistent across the country. While NSW chalked up a near-18 per cent monthly increase, Queensland a 44 per cent jump and South Australian new home sales leaped 64 per cent, sales in Victoria fell nearly 11 per cent and Western Australia declined almost 12 per cent.

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