A second consecutive monthly fall in new home sales is nothing to be alarmed about, the Housing Industry Association (HIA) has said.
According to HIA’s New Home Sales Report, new home sales declined by 4.4% in May 2016 following a 4.7% fall in April 2016. A 6.7% fall in the sale of detached houses was behind the drop, with multi-unit sales recording a 4.9% jump.
However, HIA chief economist, Dr Harley Dale, said this is nothing to be alarmed about.
"There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards,” he said.
“We remain of the view that a decline in new dwelling commencements will gather momentum in
2016/17 and 2017/18, following four years of growth which has delivered enormous benefits to the broader Australian economy.”
The economic benefit delivered by new home construction in recent years is unprecedented, he said.
Over May, detached house sales declined in three of the five mainland states: New South Wales (-11.5%); Victoria (-8.2%); and Queensland (-11%). Detached house sales increased in South Australia (3.8%) and in Western Australia (5.4%).