Recently released data has indicated that new home sales may be stabilising.
The report, conducted by the Housing Industry Association (HIA), charted an increase in new home sales from February to March, with figures up by 4.8% in New South Wales, 8.6% in South Australia and 2.3% in Western Australia.
Conversely, Queensland experienced a decrease of 4.7% and Victoria was down by 2.9% month to month.
HIA senior economist Geordan Murray said, “Given the rapid decline in new home sales throughout 2018, this moderation in the fall in new home sales suggests that the credit squeeze is easing as the market adjusts to the new lending norms.”
Murray explained that the credit squeeze was so damaging as it coincided with a period when the housing cycle was already naturally beginning to cool.
“Now, the market is showing signs of adjusting to the new levels of lending,” he stated.
While the possibility of stabilisation comes as welcome news, the market is still at risk given upcoming events.
“There is uncertainty surrounding the federal election, which typically subdues new home sales and approvals as investors and owner occupiers put decisions on hold until after the election.
“The election result will rectify this uncertainty but the potential for higher taxes on housing means a post-election rebound in sales may not eventuate,” Murray concluded.