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Sales of new homes in Australia increased by 7.7 per cent in November, continuing a trend of upward movement.
According to the Housing Industry Association (HIA) New Home Sales Report, sales have been much higher than pre-COVID levels in the three months leading up to November 2021.
The HIA New Home Sales Report is a monthly poll of the largest-volume home builders in the five largest states that serves as an indicator of future detached home construction.
HIA’s economist Angela Lillicrap said the high level of housing construction implies that the current boom would continue until 2022 and 2023.
“This is the fourth consecutive monthly increase and leaves sales in the three months to November 8 per cent higher than the previous three months,” stated Ms Lillicrap.
She further articulated how “demand for new detached and multi-unit construction has remained strong even with lockdowns. It appears that the more time people spend in lockdown, the higher demand is for detached housing”.
Looking closer at the states, in the three months leading up to November 2021, sales in NSW climbed by 27.8 per cent compared to the same period last year.
Meanwhile, other states have experienced a sales decline, with Queensland and Victoria falling by 8.6 per cent and 15.2 per cent, respectively, also over the same period.
Showing a sharp decrease are Western Australia and South Australia, which bottomed at 34.7 per cent and 36.9 per cent, respectively, compared to the same period in 2020.
Ms Lillicrap has shed light on the sudden plunge by pointing out that the “constraint on home building is not demand but the availability of land, labour and materials”.
Digging further into the root cause of the issue, she opined that due to labour and material constraints, construction timelines had accelerated dramatically.
Under normal circumstances, an increase in completions from the June 2021 quarter would have resulted from the surge of HomeBuilder projects. However, completions, as of the moment, have yet to be fulfilled.
“This has resulted in the volume of work approved but not yet commenced at its highest level in over a decade,” concluded Ms Lillicrap.
Real estate is a type of real property that refers to any land and its permanent improvement or structures that come with it, whether natural or man-made.