New home sales down in Australia for third consecutive month
New house sales have fallen in Australia for the third month in a row amid suggestions that tighter lending policies are having an impact.
Overall sales of new detached houses fell by 2% in March following a 0.7% decline in February, according to the latest new home sales report from the Housing Industry Association (HIA).
A breakdown of the figures shows that new house sales declined in three of the five markets covered by the HIA report with the largest reduction in South Australia, down 11.4%, followed by a fall of 10.2% in New South Wales and a fall of 7.2% in Victoria.
The report, which provides data on the largest volume home builders in the five largest states, also shows that two bucked the overall trend, with the largest increase in new house sales in Western Australia with a rise of 26.2% and more measured growth of 2.7% in Queensland.
HIA senior economist Shane Garrett, pointed out that home sales have not fallen for the whole of 2018 so far and this has implications for trends in the residential building industry going forward.
He explained that the reduction in new house sales in Sydney and Melbourne is likely to be the result of tighter lending policies for investors being imposed by APRA.
‘There has been a welcome increase in first home buyers participation which has partially offset the fall in investor involvement in the market,’ he said.
‘Economic recovery is underway in Queensland and Western Australia and these two states were the only ones to see new house sales rise during March. Detached house building has always been of considerable importance in these two markets,’ he pointed out.
‘HIA’s new house sales index is a leading indicator of activity on the ground. Based on today’s results, new house building activity is likely to move lower on a national basis over the next few months,’ he added.