New home sales have seen their first drop of the year, the HIA has said.
The HIA's New Home Sales Report recorded a 4.3% decline for May. The fall is the first in five months. But HIA chief economist Harley Dale said the overall figures were sstill encouraging.
"The overall profile for new home sales is a healthy one, given that May marks the first decline innew home sales this year. Sales grew by 3.8% over the three months to May 2014 to be up by 21.0% compared to the same period in 2013," Dale said.
While Dale said new home sales may have peaked, he forecase further growth for detached house building and elevated levels of multi-unit construction for 2014/15.
"Detached house construction has the potential to grow faster in 2014/15 than in 2013/14, but land supply constraints are again being exposed in this current upcycle, including a shortage of titled land in Sydney and Perth. Inadequate land supply is one prominent example of supply side constraints preventing new home construction reaching its full potential, highlighting the need for a focus on housing policy reform," Dale said.