Stable conditions boost new home sales in 2024
Monthly survey of the largest home builders in the five largest states suggests new home buyers are returning amid expectations of rate cuts this year.
NEW home sales in 2024 strengthened compared to the previous year despite high borrowing, land and building costs, according to the HIA.
Economist Maurice Tapang was speaking after the HIA’s monthly survey of the largest volume home builders in the five largest states was published.
“Interest rate stability, low levels of unemployment, strong population growth and improvements in real wages helped boost new home sales from its trough, increasing by 8.2 per cent in 2024,” he said.
“It is now almost fifteen months since the RBA last raised interest rates.
“New home buyers are slowly returning to market amid expectations of rate cuts this year.
“The recent rise in new home sales has also been geographically dispersed, driven by those markets outside of the two largest states, New South Wales and Victoria.
“Western Australia was the first market to see a notable increase in new home sales last year, with a slowdown in sales in 2024 coming as a result of capacity constraints.
“Queensland and South Australia followed, recording the strongest growth in new home sales across all markets in 2024, off their troughs in the previous year.
“The volume of new homes sold in Victoria was virtually unchanged in 2024 compared to the previous year. Sales in Victoria have yet to pick up remarkably since the pull-forward in sales in April 2024 due to regulatory changes.
“New South Wales recorded an 11.8 per cent increase in the 2024 calendar year, albeit from very low levels in 2023 when sales fell by more than 50 per cent.
“The high cost of residential land, particularly in Sydney, is preventing New South Wales from seeing a stronger increase in new home sales despite ongoing population growth and acute shortages of housing.
“The recent increase in new home sales in most markets is beginning to trickle through to approvals data, with 109,610 houses approved nationally in the most recent twelve months.
“With new home sales and detached house approvals picking up in 2024, the improvement in the volume of new homes commencing construction is likely to be sustained, progressing further into 2025,” concluded Mr Tapang.
“New home sales in Queensland rose by 40.6 per cent in the 2024 calendar year, the strongest increase across all markets. This was followed by South Australia (+25.8 per cent) and New South Wales (+11.8 per cent). Sales in Victoria were virtually unchanged (-0.6 per cent), while Western Australia recorded a 7.1 per cent decline in sales in 2024.
