New home sales down for first time in five months

by AB30 Aug 2013

New home sales fell for the first time in five months in July 2013, according to the Housing Industry Association’s (HIA) New Home Sales report.

"There has been strong upward momentum to new home sales since the record lows plumbed in 2012,” says HIA chief economist, Dr Harley Dale.

“One monthly fall, while disappointing, does not really change the story. That having been said, the re-emergence of a sustained decline for new home sales over the second half of the year would obviously be a negative signal for residential construction and the wider Australian economy."

The report, a survey of Australia's largest volume builders, showed that total seasonally adjusted new home sales fell by 4.7% in July 2013. This was the first decline in total sales since a drop of 5.3% back in February. Detached house sales fell by 6.4% in July, which was also the first decline since February (when detached house sales slipped by 4%).

Conversely, sales of multi-units posted a monthly rise of 7.2% following a sharp fall of 17.5% in June.

"What we need to observe over the remainder of this year is strong growth in new home sales volumes. To date, what we have seen is a recovery from a very low base which takes sales volumes back to levels that are reasonable, but still well short of healthy. It remains the case that detached house sales are running well below long term average levels in four out of five mainland states. The aggregate multi-unit sales measure is in a similar position of under-performance," says Dale.

In the month of July 2013 detached house sales fell by 4.2% in New South Wales, 10.5% in Victoria, 9.6% in South Australia, and 10.8% in Western Australia. Detached house sales increased by 12.6% in Queensland in July following three consecutive months of decline.