Sales of newly-built and existing homes plummeted in the past three months as demand dried out.
Sales of newly built homes slumped by 4.6 per cent nationwide in the December quarter, the sharpest decline since the onset of the pandemic, as demand dried up amid rising interest rates, a new HIA report shows.
The back-to-back increases in the cash rate have forced many recent buyers of new homes to dump their contracts, sparking a jump in cancellation rates to 20.3 per cent during December – the second month in a row when cancellation rates hit 20 per cent. Before the pandemic, termination rates were typically below 10 per cent.
This reflects both the change in the purchasing power of the customer and builders restructuring their businesses to reflect a weaker market, according to Mr Devitt. NSW posted the largest drop in new home sales of the large states, plummeting by 48.6 per cent to just 393 over the past three months. In December alone, sales slumped by 17.8 per cent.
“The combination of an acceleration in cancellations and exceptionally low sales volumes will see building activity slow in New South Wales, and nationally, in the second half of 2023.” “However, it’s reasonable to expect there is some pent-up supply accruing in the housing market, as prospective vendors continue to delay their selling decision until housing market conditions improve.
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