Enquiries for properties on realestate.com.au decreased in February 2022, with new home enquiries dropping further than for total stock.
New home enquiries were down 13% on January 2022 and 17% year-on-year, compared to enquiries for all properties in the buy section, which were only down 5% month-on-month and 2% year-on-year.
A decrease is usual in February each year; however, the drop in February 2022 was 1.4 times larger than experienced at the same time in 2021.
It is likely not a coincidence that this comes in the same month that new listings (for new and established properties) surged by 27.8%, bumping up the total listings stock by 11.3% month-on-month.
Property seekers have partly been attracted to new homes developments, during the pandemic, due to the lack of available established properties on the market.
And, although new development projects were up 3% on the previous month, they have been decreasing steadily since November 2020.
Construction cost escalation, driven by supply chain issues, may also be causing an easing of enquiries, as the uncertainty of the final building costs may be making new builds less desirable.
Enquiries by project type
In terms of enquiries for particular project types, apartment development enquiries were down 14% month-on-month and 10% year-on-year.
Land estates were down 11% month-on-month and 19% year-on-year.
And, retirement living enquiries were down 13% month-on-month and 7% year-on-year.
There is no state or project type that is driving the decrease more than others. The drop in enquiries is across the board.
First-home buyers back off as investors rejoin the market
The proportion of first-home buyers looking at new properties dropped by 9% in February, while investors increased by 12%.
As there are currently fewer incentives for first-home buyers, the proportion of them looking at new home projects are now on par with enquirers that identify themselves as “buyers”.
More enquiries come from first-home buyers in South Australia, than the other buyer types.
South Australian first-home buyers are eligible for a $15,000 grant, for new builds as long as the total property is below $575,000.
A similar incentive is available in VIC; however, the grant is only $10,000, in a city where property prices are much higher.
The largest uptick in month-on-month enquiries from investors was in South Australia, followed by Queensland and Victoria.
Most popular projects
The top 10 most enquired about apartment developments in February, were all in QLD or NSW, with those in Surfers Paradise, Palm Beach (both in QLD) and Rouse Hill (NSW), clocking up the most enquiries.
Jade apartments, in Albion, Brisbane, was the most enquired about apartment project, just beating EVA Tenth Avenue, Palm Beach, QLD, which was number one in December and January.
QLD apartment projects also attracted the most enquiries per listing, at 453, 26% higher than VIC, which had an average of 358.
Forest Ranch, in Huntley, NSW, continued to be the most enquired about house and land estate, for the third month in a row.
The suburbs with the highest enquiries were Ripley, QLD, Tarneit, VIC and Huntley (home of the most viewed project, above), NSW.
Huntley also has the highest average enquiries per listing, at 814, although it only has one current project.
Looking ahead
If we continue to see an increase in new listings, property seekers may move their focus back to established dwellings, as opposed to new builds.
And, unless there is an increase in new home stock available, there will be fewer options for buyers.
Data from the Australian Bureau of Statistics shows a steady decline in new dwelling approvals, from their peak in March 2021, and this suggests that there will also be a decrease in marketed properties going forward.
Without incentives to encourage new home builds, it is likely that, as we move into the autumn and winter months, we will see a slow down in enquiries for new developments.
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