Conveyancers may be hit by sagging new home builds

A SLUMP in new home builds nationwide is set to continue into next year, adding to mounting pressures on conveyancers.

New research from the Real Estate Institute Queensland (REIQ), released on Thursday, found construction of new homes fell in the September quarter as sales fell and developers reported weaker buyer demand.

The research showed Mirvac sold 429 homes in the three months to September, down almost 233 per cent from the previous quarter.

Stockland also completed fewer transactions, logging 1,506 residential sales in Q3, an almost 40 per cent to from the prior quarter, the research found.

HIA senior economist Tom Devitt predicted prices to stabilise early next year, which would drive more new home building.

For conveyancers, he said residential transaction volumes would likely follow a similar path.

“One indicator improves, then the next, then the next,” he said.

The comments come after AIC NSW earlier this month said trade was down around 30% since the RBA’s latest rate hike in September.

Lifting rates has further slowed business activity for practitioners already grappling with fallout from the federal government’s budget tax changes, according to AIC NSW.

Devitt said HIA research showed “sales across the country have been coming back down again because of everything that’s been happening this year”.

He pointed to higher interest rates and the federal government’s changes to negative gearing as the main drivers, along with increased fuel costs.

“Queensland was the only state that declined even further in September they’re down quite substantially,” Devitt said.

But he said there were bigger concerns for NSW and Victoria’s markets given their housing recoveries were less established heading into 2026.

“Unlike other states like Queensland and WA and South Australia – their recoveries have been going for quite a while so their builders still have quite a bit of a pipeline to continue on with, previous sales and previous commencements to continue on with,” he said.

“They can probably handle a bit of a dearth of new work entering the pipeline for a little while, at least longer than the builders in Victoria and NSW.”

Over the longer term, the outlook remained mixed, according to the economist.

“None of the fundamentals of the market have really changed in fact they’ve gotten even tighter,” Devitt said.

“All the underlying demand is still there, population growth is still relatively strong, and the labour market is tight.

“On the supply side it’s become even more constrained because if this year’s developments so  we’re now looking at fewer homes being built over the next five or so years.”

REIQ CEO Antonia Mercorella said the slowdown in new home builds was disappointing.

“We were finally starting to see some momentum building behind new housing supply, and now we’re seeing it rapidly lose steam,” Mercorella said.

“When some of Australia’s biggest residential developers are reporting sharp falls in sales and buyer inquiries, we need to take notice. Today’s weaker demand risks becoming tomorrow’s housing shortage.”

The slump was due to a “perfect storm” of rising interest rates, falling borrowing capacity and the government’s property tax changes, she said.

“Uncertainty is high, and buyer confidence is low. Not surprisingly, the impact of this is that buyers are nervous about buying off the plan.”