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ISCOVER
Staff Reporter
The Housing Industry Association has applauded the Reserve Bank’s decision to cut the official cash rate after new data found new home sales fell to a 15 year low in August.
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According to the latest HIA New Home Sales report, home sales fell 5.3 per cent in August 2012, reflecting a fall of 5.8 per cent in the persistently weak detached housing segment and a 2.5 per cent decline in the multi-unit market.
"New home sales for August are the latest in a string of soft new housing updates for this financial year, and that follows a very weak year for new home building in 2011/12,” HIA chief economist Dr Harley Dale said.
“Indeed, following two consecutive years of decline in new housing starts over 2010/11 and 2011/12, and leading indicators pointing to weakness extending into 2012/13, policy settings in August 2012 were clearly inappropriate.
“A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome.
“It remains the case, however, that rate cuts won’t single-handedly generate the new home building recovery Australia requires. Governments have an important role to play in driving reform measures to lower the excessive tax base faced by the sector. In 2012 that reform process remains too slow and in some quarters is virtually non-existent.”
