The Australian housing market appears to be finding its footing, with new home sales in September holding steady compared to August, according to the latest figures from the Housing Industry Association (HIA). HIA Economist Maurice Tapang noted that while the market has seen some shifts, overall confidence in home building is gradually improving.
Tapang commented on the results: “New home sales in September remained unchanged from the previous month, leaving sales over the past twelve months up by 8.6 per cent compared to the same period last year.” This stability comes alongside an increase in house approvals, which indicates growing optimism in the housing sector.
Sales figures, however, varied across states. South Australia, Western Australia, and Victoria all recorded gains, while New South Wales and Queensland saw dips. The standout performer was South Australia, where sales surged by 32.4 per cent in September, partly due to the anticipated changes to the National Construction Code (NCC) that took effect on 1 October 2024. Tapang remarked that this pull-forward in sales may create a slowdown in the coming months, as seen previously in New South Wales and Queensland following similar shifts.
Consumer confidence is another key factor showing early signs of recovery. The most recent Westpac-Melbourne Institute measure of consumer sentiment delivered the best result in over two years, reflecting a cautious optimism. However, Tapang warns that it could be a while before this translates into a noticeable upswing in home building. “Big purchases like homes are decisions many people postpone during uncertain times, particularly when economic conditions fluctuate.”
Despite the variations across states, there is a broader sense that the market may have already passed its lowest point earlier in 2024. “Leading indicators suggest that the trough in home building activity was reached mid-year, and although the data is clouded by the NCC changes, things are beginning to turn around,” Tapang explained.
In terms of quarterly results, new home sales for the September 2024 quarter were down 3.9 per cent compared to the same period last year, largely due to the high sales volume recorded in New South Wales in September 2023. Queensland, on the other hand, posted a staggering 50.2 per cent rise in sales for the same quarter, with South Australia following with an 18.5 per cent increase.
Though challenges remain, the combination of strong population growth, low unemployment, rising real wages, and the prospect of stable interest rates suggests a brighter outlook for new home building in the near future. For now, though, the housing market seems to be walking a careful line between recovery and restraint.
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