Despite a slight improvement in October, new home sales continue to point to a renewed decline in residential construction, claims the Housing Industry Association.
The latest HIA - Jeld-Wen New Home Sales Report, a survey of Australia’s major residential builders, showed that the number of new homes sold increased by 2.4 per cent in October 2010 following a downwardly revised 1.7 per cent decline in the month of September. Detached house sales increased by three per cent in October while multi-unit sales fell by 2.6 per cent.
Over the three months to October new home sales fell by 9 per cent to be 17 per cent lower when compared to the same three month period in 2009. Over the three months to October 2010 detached house sales were down by 10 per cent while the sale of multi-units was up by 1 per cent.
HIA chief economist, Dr Harley Dale, says that ahead of the damaging impact being felt from the November interest rate hikes, a raft of leading housing indicators provided compelling evidence of a renewed new home building downturn in 2011.
“Fiscal stimulus has all but run its course. We now face a combination of higher interest rates, on-going severe credit constraints, and inadequate progress in addressing perennial supply side obstacles such as a lack of readily available, affordable land. These factors have rendered Australia’s new home building recovery unsustainable,” says Dale.
In the month of October 2010, detached new house sales increased by 5.9 per cent in Victoria, 7.4 per cent in Queensland, and 0.9 per cent in Western Australia, although sales volumes fell in all three of these markets over the three month period to October. In the month of October 2010 sales fell by 6.1 per cent in New South Wales and by 1.3 per cent in South Australia.
