Nobody wants to build housing in falling market

Two reports suggest Australia’s residential construction market is weakening significantly amid falling prices, rising interest rates, and the federal budget changes to negative gearing and capital gains tax.

Stockland, the country’s largest listed residential developer, reported its lowest level of housing inquiries in at least seven years. Higher interest rates, worsening affordability, rising construction costs and recent investor tax changes are causing prospective buyers to delay decisions, raising concerns about a future decline in housing construction.

Stockland reported that inquiries for new housing fell to 10,452 in the September quarter, almost half the 20,183 inquiries recorded earlier in the year and the lowest level published since at least 2020. The company views inquiries as a leading indicator of future housing sales.