Demand For New Homes Strong Into 2022
The HIA has reported continued strong new home sales, with the number of homes under construction growing in the first quarter of 2022.
Even though detached dwelling sales declined slightly, the quarter is still significantly higher than could be expected pre-pandemic. According to HIA economist Thomas Devitt "the quarter is still one of the strongest on record and stronger than any quarter in the 20 years before the pandemic."
Why Are New Home Sales Still Strong
Demand continues to be driven by "a shortage of homes and an acutely tight rental market that has resulted in rapid house price and rental price growth" according to the HIA's New Home Sales Report.
Increasing interest rates and a climbing cost of living have had little effect on the housing market - new home sales have increased by 3.9% on February's performance.
What's The Outlook For The Future?
Month-by-month, almost every state saw an increase in sales to March 2022 except for New South Wales and Western Australia - the former largely due to latent demand from the HomeBuilder grant and the latter due to supply constraints.
Nevertheless, strong work pipelines will likely keep builders busy and employment levels high until at least 2023.
According to the HIA, the biggest challenges facing the construction industry won't come as any surprise: the availability of land, labour and materials.
1. HIA New Home Sales Report March 2022
2. HIA, "Pipeline of New Home Construction Grows" Wednesday 13th of April, 2022