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New home sales are likely to decline this financial year but will still remain “historically elevated”, the Housing Industry Association has said.
Sales suffered a month-by-month drop of 5.7 per cent in July, according to the association’s New Home Sales Report, which surveys Australia’s largest volume builders.
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That monthly decline included a 4.7 per cent fall in detached house sales and a 10.9 per cent fall in multi-unit sales.
New home sales also dropped by 3.5 per cent over the quarter, with falls of 5.4 per cent for South Australia, 4.4 per cent for Western Australia, 3.6 per cent for NSW, 2.3 per cent for Victoria and 0.7 per cent for Queensland.
Chief economist Harley Dale said 2014/2015 was likely to be a positive year despite the emergence of a “downward trend” in new home sales.
“In terms of forward indications, new home sales and building approvals may have peaked for the cycle, but their levels remain historically elevated,” Dr Dale said.
“This situation, together with longer lag times and a repositioning of geographical momentum at this stage of the current cycle, combine to mean that 2014/2015 will be another healthy year for new home construction.”
Dr Dale said the housing market would improve if governments increased the supply of land and reduced housing delays.
