New homes sales increased in Australia in November, latest figures show
New homes sales increased in Australia in November, up by 3.6%, but are still some 12.2% below last year, the latest research shows.
However, the rise is not set to mark an end to falling sales in the sector which has characterised much of 2018, according to the Housing Industry Association (HIA).
‘After a string of weak months, it is pleasing to see new home sales finishing the year on a slightly more positive note,’ said Geordan Murray, HIA senior economist.
‘Despite the monthly rise, the overall level of sales in November is well below the level 12 months previously and also below what had otherwise been typical for most of the period since 2014,’ he explained.
‘Given the softening of the Sydney and Melbourne housing markets and the fact that the tight credit environment remains an issue for borrowers, we are not confident that the lift in sales in November marks the end of the downward trend seen throughout 2018,’ he pointed out.
He also pointed out that a tighter lending environment has meant that the credit squeeze first started to bite the investor side of the market in 2017 and more recently the effect of this squeeze has spilled over into the owner occupier market.
‘Tighter credit conditions facing owner occupier borrowers are now weighing on the detached house building market, illustrated clearly by the reduced levels of new home sales and building approvals,’ said Murray.
‘With the Royal Commission scheduled to release recommendations early next year we see a risk that the credit squeeze may drag on into 2019. With the new home market already looking vulnerable, policy makers will need to proceed cautiously when responding to the Commission’s recommendations,’ he added.
A breakdown of the figures shows that the monthly rise was geographically widespread. Sales increased in Victoria by 7.3%, in Queensland by 2.1%, in South Australia by 7.4% and in Western Australia by 2.2%. They fell by 3.3% in New South Wales.