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New home sales fall 1.7%
In a blow to housing affordability, fewer new homes are being built, a survey has revealed.
The Housing Industry Association, in its monthly survey of the nation’s largest volume home builders, found that 22,074 new homes were sold during February, March and April.
This was 1.7 per cent lower than the 22,927 new homes sold during the same period in 2016.
Private house sales fell 7.5 per cent to 16,777, although multi-unit sales jumped 10.6 per cent to 5,297.
As a general rule, building more homes puts downward pressure on prices, while building fewer homes puts upward pressure on prices.
| New home sales | 3 months to April 2016 | 3 months to April 2017 | Change |
|---|---|---|---|
| Private houses | 18,139 | 16,777 | -7.5% |
| Multi-units | 4,789 | 5,297 | 10.6% |
| Total | 22,927 | 22,074 | -1.7% |
Sales rising in Victoria
Victoria was the only one of the five surveyed states to record an increase in the sale of new houses, with volumes rising 0.8 per cent to 6,066.
Conversely, sales volumes fell in NSW, Queensland, South Australia and Western Australia.
| Region | 3 months to April 2016 | 3 months to April 2017 | Change |
|---|---|---|---|
| NSW | 3,896 | 3,138 | -19.5% |
| Victoria | 6,018 | 6,066 | 0.8% |
| Queensland | 4,022 | 3,498 | -13.0% |
| SA | 942 | 878 | -6.8% |
| WA | 3,261 | 3,196 | -2.0% |
State-by-state forecasts
Looking at NSW, the Housing Industry Association (HIA) said that although new house sales increased in March and April, it is too soon to call this a trend. “On-the-ground reports indicate that demand remains strong, but the unavailability of shovel-ready residential lots remains an insurmountable barrier to growth in new detached house sales.”
The HIA said the situation was brighter in Victoria, where the number of new detached house sales grew strongly in April. This represented “the third-strongest monthly result of the cycle”.
In Queensland, private detached house sales have consistently declined each month since reaching a highpoint in November 2016. However, weather permitting, the HIA expects that volumes will grow over the next few months.
South Australia has an “ailing market”, according to the HIA. “There is little to suggest that new home sales in South Australia could rebound to the historic levels any time soon.”
Western Australia, though, appears ripe for a rebound. “The latest level of both sales and approvals are (mercifully) above what appears to have been their respective cyclical lows plumbed late in 2016. Importantly, this consistency between sales and approvals provides a fairly strong indication that the declines in house building in Western Australia may too have just about run their course, with a return to growth hopefully not far off.”
Disclaimer
This article is over two years old, last updated on June 6, 2017. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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