New home sales not enough to reverse downward trend

Sales of new homes increased over August according to the Housing Industry Association (HIA), though this was not enough to undo the slowdown seen across the nation this year.

The latest HIA New Home Sales report – a monthly survey of the largest volume home builders in Australia’s five largest states – found that new home sales increased by 9.1% in August 2017, as a result of very strong results in Victoria and Western Australia.

HIA principal economist, Tim Reardon, said that while the increase in sales in August offsets larger sales declines in recent months, it is not sufficient to reverse the decline in sales that has been evident since early 2016.

“Results in July and August have been affected by government interventions in NSW and Victoria which have seen first home-buyers returning to the new home market.”

“Victoria has seen record numbers of new building approvals and new home sales are continuing to drive even higher. Strong population growth and employment growth, fortified with enhanced first home buyer incentives, is prolonging the boom in building activity.”

According to Mr Reardon, the HIA forecasts a slowdown in building activity through until 2018/19.

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