A downwards trend in new home sales has emerged for the 2014/15 fiscal year ahead, as sales dropped off a little in July following a strong recovery in the new home market during 2013/14.
A drop of 5.7% was recorded for the month of July, according to the Housing Industry Association’s New Home Sales Report. Over the three months to July, total new home sales declined by 3.5%. Both detached houses and apartments experienced a less active market, with sales dropping by 4.7% and 10.9% respectively.
Looking ahead, HIA chief economist Harley Dale said although new home sales and building may have peaked for the cycle, he forecasts that they will still remain at historically high levels.
“This situation, together with longer lag times and a repositioning of geographical momentum at this stage of the current cycle combine to mean that 2014/15 will be another healthy year for new home construction,” he said.
To keep new home sales and building at high levels to extend the recovery period, Dale argues that there needs to be “serious policy reform”.
“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 said.