Demand for predominantly timber-framed housing in Australia’s two largest markets is rebounding “from a very depressed state,” with a rise in sales volume, the fruits of a second cut to the cash rate so far this year. That is according to HIA Senior Economist Maurice Tapang, who said that despite sales volumes reaching 13-month highs and strong fundamentals, “there remains a shortage of housing in Australia due to the regulatory barriers to increasing supply.”
Speaking ahead of the release of the HIA New Home Sales Report, Tapang said the monthly survey of the country’s five largest builders is a leading indicator of future detached home construction. Tapung said sales across the states are a “mixed bag” and (at least in May) were carried by massive gains in New South Wales and Victoria.
“Sales volumes in New South Wales and Victoria have been exceptionally weak over the past two years. This increase is the first suggestion of improving market conditions in these states,” he said. “New South Wales reached a 20-month high since the pull-forward in new home sales in September 2023, while Victoria reached a 13-month high since its pull-forward in April 2024.”
Meanwhile, in Queensland, the country’s third-largest market, sales remained relatively stable in May, following a strong increase in recorded sales in April: “This upward trend in the volume of sales in Queensland has been evident for at least the past year.”
Plans for 25,000 houses in tatters after turf club votes against Rosehill sale
The report comes after the NSW Government’s plans to build 25,000 dwellings on the site of Rosehill Gardens Racecourse were dashed after the Australian Turf Club voted against a proposal that would have helped ease the squeeze in one of the country’s tightest housing markets. In response, Chris Minns, NSW Premier, said the government would now double down on ambitious proposals to fix the state’s housing crisis: “The closeness of the result makes it more difficult to take, not easier. It feels like a golden opportunity that has slipped through our fingers,” he said. “We should be taking more risks when it comes to housing. We’ve been far too timid for far too long. “More proposals like this are needed.”
- To learn why prefab construction – including mass timber – is crucial in helping the NSW government close the housing gap, click here for Wood Central’s special feature from the 2024 NSW budget.
