The Housing Industry of Australia (HIA) released new home sales data for November, which “produced the weakest three months of sales since the first national lockdown froze new home sales in early 2020”.
“Sales in the three months to November are down by 23.4% on the previous quarter, and down by 29.1% on the same quarter in 2021″, according to the HIA.
HIA said “the RBA has brought the housing boom to an end”. It also claims that “the effect of the latest hike in December will not be fully reflected in building activity until late-2023” and warns that “further hikes will cause a deeper and more prolonged trough in home building activity”.
“The RBA will not restore the economy to stable growth by putting the housing industry through boom-and-bust cycles,” concluded HIA Economist Tom Devitt.
The crash in new home sales is mirrored in the Australian Bureau of Statistics’ construction finance data, which collapsed 63% from their HomeBuilder peak in October:
The impact of the declines in new home sales and loans will take time to flow through to the economy given there is still a large pipeline of unfinished homes still under construction.
The full downturn will likely arrive from mid next year once these homes are completed. By then, the housing industry faces recession just as immigration has risen to record levels.
Accordingly, the rental market will tighten further, driving up rents and pushing thousands of Australians into homelessness.
