Govt policy hurting new home sales
Housing expert said 'policymakers need to work to reduce the costs of home building' in Victoria.
VICTORIA’s “rushed and last-minute implementation of new laws” has caused a state of flux with new home sales, according to an industry report.
The Housing Industry Australia’s Victorian executive director Keith Ryan said new home sales in the state declined by 27.4 per cent in May, the largest monthly decline of all the large states.
The HIA New Home Sales report is a monthly survey of the largest volume home builders in the five biggest states and is a leading indicator of future detached home construction.
“Victorian policy uncertainty is adding to the national and international headwinds facing the industry,” Ryan said.
“Home builders and buyers have already had their confidence shaken this year by three interest rate increases, fuel price surges and supply disruptions associated with the Iran War, and uncertainty surrounding the Australian government’s housing tax changes.
“The Victorian government is compounding these headwinds with the rushed and last-minute implementation of new laws including the first resort home warranty scheme and new home building contract laws.
“Purchasing a home is the largest financial decision most households will make. When households are uncertain about the economic outlook, their employment prospects or future housing policy settings, they often delay that decision until there is greater clarity.”
Ryan said Victoria’s home building recovery was one of the last in the country to start gaining momentum.
“The overall trajectory for home building in Victoria is still positive, on the back of ongoing strong population growth and low unemployment rates,” he said.
“Victoria’s population expanded by 1.7 per cent or nearly 120,000 people last year, the unemployment rate has remained below five per cent, and household sizes continue to shrink.
“This has supported housing demand in Victoria, with new home sales over the last three months still more than one-third (plus 36 per cent) greater than the same quarter a year earlier.
“The poor result for the month of May reflects a loss of confidence rather than a deterioration in the underlying demand for housing.
“Labour shortages, rising construction costs and limited access to shovel-ready land continue to constrain the industry’s ability to increase supply.
“Any extra policy-introduced obstacles this year are most unwelcome and policymakers need to work to reduce the costs of home building if Victoria’s housing needs are to be met,” Ryan concluded.
