New home sales fall in Australia for second month in a row
Sales of new detached houses in Australia fell for a second month in a row in February 2018, although several key markets experienced growth, the latest housing market analysis shows.
Despite the fact that the overall volume of sales declined during February, reductions only occurred in two of the five states covered by the new home sales report from the Housing industry Association (HIA).
HIA senior economist Shane Garrett explained that overall, however, these reductions outweighed the increases which took place elsewhere.
The largest fall in sales was in Queensland with a decline of 16.3%, while sales also fell by 9.9% in Western Australia, the data shows.
The largest increase in sales was in New South Wales with growth of 11.7%, followed by growth of 10.3% in South Australia and growth of 4.8% in Victoria.
‘The decline in new house sales during the first two months of 2018 is consistent with our expectation that residential building activity will move lower over the next 12 months,’ said Garrett.
He explained that tighter restrictions around investor lending and heavier obstacles to foreign investor participation are contributing to the weaker conditions in new dwelling construction.
And he pointed out that new house sales in New South Wales saw decent growth during February probably due to several favourable changes made by the NSW Government relating to first time buyers last year and these have been beneficial to the state’s housing industry.
‘Our forecast is that new home sales will trend downwards during 2018 in line with new home building activity. We expect things to bottom out in late 2019 before modest growth resumes,’ he added.