New home sales nosedive
A new report released by the Housing Industry Association (HIA) shows a disappointing start to the 2012/13 financial year for new home sales.
HIA’s New Home Sales report surveyed Australia’s largest volume builders, showing a 5.6 per cent decline in July, with a 5.5 per cent drop in detached housing and 6.4 per cent in the multi-unit market.
"New home building is the weakest sector of the Australian economy. Despite interest rate cuts in 2011/12, the two updates for this financial year – new home sales and the Australian Industry GroupHIA Performance of Construction Index - both point to deteriorating conditions in July," said HIA Chief Economist, Dr Harley Dale.
Despite the attractive market conditions, including lowe interest rates and easing pressure on skilled labour availability, Dr Dale said that consistently weak consumer and business confidence is weighing heavily on new housing development.
“Combine that low confidence with very tight credit conditions and excessive taxation, and you have the unpalatable recipe for the recessionary conditions facing new housing,” said Dr Dale.
In July 2012 the number of seasonally adjusted new detached house sales fell by 6.0 per cent in New South Wales, 4.6 per cent in Victoria, 8.9 per cent in South Australia, and 14.4 per cent in Western Australia. Queensland bucked the trend with a rise of 11.1 per cent in July