The Housing Industry Association’s (HIA) New Home Sales Report found that sales increased by 22.1 per cent in April.
According to HIA chief economist Tim Reardon, this was driven by home buyers rushing to get ahead of the increased government regulations, which are expected to add around $25,000 to the cost of building a new home.
“Changes to the National Construction Code (NCC) came into effect in Victoria and Queensland on the first of May.
“This is expected to add thousands of dollars to the cost of construction through, among other things, the code’s new energy efficiency standards,” Reardon said.
As a result, home buyers rushed to sign a contract for the construction of their new homes by the end of April.
The report found that all the larger states recorded increases in new home sales when compared to March 2024. This was led by Victoria at 34.9 per cent, followed by NSW (33.1 per cent), Queensland (25.5 per cent), South Australia (17 per cent), and Western Australia (1.1 per cent).
Over the three months to April 2024, new home sales were led by Queensland, up by 57.1 per cent, followed by South Australia (20.8 per cent), Victoria (19.5 per cent), NSW (15.8 per cent), and Western Australia (12.5 per cent).
According to Reardon, a similar phenomenon was experienced in NSW in September 2023 when the state introduced its latest energy efficiency standards, which added to the cost of a new home.
This was then followed by an “equally large drop” in sales in the months after.
Reardon said a “shadow” of demand for new homes is expected in Victoria and Queensland over May and June this year, which would reflect the sales that were drawn forward into April.
“Ongoing changes to building codes will continue inflating the costs of construction with the next phase of building regulations now open for public consultation.
“If ever there were a good time to stop inflating the cost of home building, this must be it.
“Lowering the cost of delivering new homes to market is essential to achieving the Australian government’s target of 1.2 million new homes over the next five years, and improving housing affordability across the country,” Reardon said.
[RELATED: Apartment construction must be doubled: HIA]
