New home sales fall down under

New figures from the Housing Industry Association found that sales of new build property in Australia dipped last month despite a strong positive growth so far in 2013. Indeed, seasonally adjusted new home sales fell by 4.7 per cent, the first monthly slide since February.

Detached house sales fell by 6.4 per cent in July, which was also the first decline since February (when detached house sales slipped by 4.0 per cent).

“There has been strong upward momentum to new home sales since the record lows plumbed in 2012. One monthly fall, while disappointing, does not really Change the story,” said HIA Chief Economist, Dr Harley Dale.

“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.”

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

“What we need to observe over the remainder of this year is strong growth in new home sales volumes,” Dale added.

“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.”

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

Dale continued: “To be confident that actual new home construction will grow in 2013/14, we need to see clear and consistent evidence of further upward momentum in leading indicators such as new home sales.”