Data released last week has shown that new home sales have fallen further in each of the three months since the introduction of COVID-19 restrictions.
“In March, new home sales fell to their lowest level on record, they fell further in April and lower again in May,” explained Housing Industry Association chief economist, Tim Reardon.
“The first signs of this contraction will flow through to work on the ground as early as July, before falling more significantly from September onwards.”
New home sales fell by 4.3% in May. Over the three months to May, sales were down by 20.3% compared to the previous three months.
Sales were also 18.2% lower in the three months to the end of May than at the same time in 2019, which was already at a pre-2019 federal election low.
“In parallel, the number of cancellations of projects, which are typically around 7 – 9%, are now 26%. This compared to a 17% cancelation rate after the GFC,” Reardon added.
“[However] the announcement of the HomeBuilder program in June should arrest the fall in new home sales and improve market confidence, not just in the home building sector but across the wider economy.
“This will improve the outlook for employment in the sector in the second half of 2020 and into 2021,” he concluded.