Despite the federal government’s bold target to facilitate the building of 1.2 million new homes in the five years from July 2024, new home sales are currently falling.
Sales of new homes across Australia fell by 2.4% in July, while sales in the July quarter were 33.4% lower than the same period last year, according to the Housing Industry Association (HIA).
HIA senior economy Tom Devitt said the current level of weak home sales would probably translate to a decade-low level of home building next year.
“Even a cut to the cash rate now would not produce a recovery in new house commencements until the second half of 2024,” he said.
“Meeting the appropriate levels of new housing for Australia’s current and future population will require changes to the other policies that inflate construction costs. These are not only interest rates, but also tax settings, land release and planning reforms, and macro-prudential rules that squeeze out owner-occupiers and investors alike.”
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