Coronavirus: New home sales in Australia lowest on record
Consumers are cancelling sales of new homes at a rate four times higher than during the GFC.
Sales of new homes in Australia have fallen to their lowest levels on record, with the Housing Industry Association finding a 23 per cent drop since the coronavirus pandemic struck in February.
A survey of the 100 biggest home builders in the country have found that COVID-19 restrictions have pummelled the construction sector as consumers cancel sales at a rate four times higher than during the 2008 global financial crisis.
HIA chief economist Tim Reardon said the rate of COVID-related cancelled new home sales would lead to a more than 50 per cent fall in the volume of new builds in the foreseeable future.
“In March, new home sales fell to their lowest level on record and they fell further in April,” he said.
“In parallel, the number of cancellations of projects now exceeds 30 per cent – this is more than four times the typical rate of cancellations.
“During shocks such as the GFC or the 2018 credit squeeze, the cancellation rate peaked at 17 per cent.
“In net terms, this equates to a contraction of more than 50 per cent in the volume of new building work in the future and this will begin to be felt across onsite activity in the second half of 2020.”
The sobering economic data comes as the April jobs report is set to show the initial damage of the pandemic on employment.
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