New residential property sales in Australia fell by 5.7% in July and are down 3.5% on a quarterly basis, according to the latest new homes index from the Housing Industry Association.
The monthly decline was reflected in both detached house and multi-unit sales, the former falling by 4.7%, while the latter was down by 10.9%.
But the HIA still expects 2014 to see a reasonably healthy level of sales in the sector as the 2013/2014 fiscal year was very strong. But it said it was disappointing that the new fiscal year has seen a relatively weak start.
‘The 2013/2014 fiscal year saw the recovery in new home sales gather strong momentum. The 2014/2015 year, however, has started with confirmation of a downward trend emerging,’ said HIA chief economist Harley Dale.
‘In terms of forward indications, new home sales and building approvals may have peaked for the cycle, but their levels remain historically elevated. This situation, together with longer lag times and a repositioning of geographical momentum at this stage of the current cycle, combine to mean that 2014/2015 will be another healthy year for new home construction,’ he explained.
‘A serious focus on addressing conspicuous impediments to new housing supply, such as large and costly planning delays and a significant lack of titled land would of course extend the recovery, to the benefit of economic growth, labour market outcomes, and housing affordability,’ he added.
A breakdown of the figures show that in July detached house sales increased by 4.1% in South Australia and by 3.1% in New South Wales but fell by 9.3% in Victoria, by 7.1% in
Western Australia and by 6.5% in Queensland.
Over the three months to July 2014 detached house sales declined in each of the surveyed states, albeit to varying degrees. Sales fell by 5.4% in South Australia, by 4.4% in Western Australia by 3.6% in New South Wales, by 2.3% in Victoria and by 0.7% in Queensland.