Home builder AV Jennings has moderated its outlook and no longer expects its full year results to better those from 12 months ago, as consumers delay major purchases.
Property contract sales fell from 100 in February to 57 in March as the coronavirus pandemic took hold, the company says.
There were 51 sales in April, while the May figure is tracking in line with the previous month.
The federal government’s social distancing restrictions meant auctions and open homes were not allowed (although these have since resumed). Private inspections were still possible.
The downturn was felt across the industry. Sales of new homes fell by more than 22 per cent since coronavirus restrictions were imposed, according to the Housing Industry Association.
Sales in March were a record low, and April figures were lower.
The claims are based on sales data from the largest 100 home builders in Australia.
The Association’s economist Tim Reardon said many customers cancelled contracts in recent months and this would lead to a significant reduction in building work in the second half of the year.
The lead time for home building was six to nine months, he said, which meant the easing of restrictions would not prevent the loss of work.
The pandemic has also changed AV Jennings’ earlier assessment of its full year results.
In February, management said it expected a stronger outcome for the 2020 financial year than the previous one.
The company today said that statement was no longer valid.
Its using the federal government’s JobKeeper wages program to retain staff, with most employees working four days per week.
Shares in the company are down nearly 40 per cent so far in 2020 amid a wider market downturn.
There were trading lower by more than 1.0 per cent to 37 cents at 1303 AEST.