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Contradictory housing data is sending mixed signals to the Reserve Bank who will today decide whether or not to raise the official cash rate for the third time in as many months.
Figures from the Housing Industry Association (HIA) showed the number of new home sales in Australia fell by 6 per cent for the second consecutive month following the first time buyer surge in August.
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Detached houses seemed least popular with sales having progressively fallen since September. And while the number of apartments sold has consecutively risen over the past few months, sales remain at an all time low.
HIA’s chief economist Dr Harley Dale said that home sales were further hampered by higher interest rates and the softening of first home buyer activity.
“A decent and sustainable new home building recovery needs strong momentum from private sector trade-up buyers and investors and we seem to be falling short on that score as we near the end of 2009,” Dr Dale said.
Despite the drop in sales, house prices have risen steadily across Australia, according to ABS data.
On average, prices have increased by 4.2 per cent since last quarter - a significant 6.2 per cent increase since September last year.
Sydney and Melbourne were the main contributors to the weighted average price increases, with Perth closely following.
