New house sales down for second month in a row

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Mar 28, 2018

New house sales down for second month in a row

New house sales rose in three states, but large falls in Queensland and Western Australia dragged the overall result into negative territory.

Image: Stokpic via Pexels..

Sales of new houses fell by 0.7 per cent in February in seasonally adjusted terms, after falling by 2.1 per cent in January.

Sales of new houses are down 1.4 per cent for the year to February.

“Sales of new detached houses declined for the second consecutive month during February 2018, although several key markets experienced growth,” said HIA senior economist Shane Garrett.

Declining sales of new houses were so large in two states, they outweighed gains in the other three states covered by the report.

The number of new detached house sales rose the most in NSW, climbing 11.7 per cent in February. In contrast, the sale of new detached houses fell the most in Queensland, with a slide of 16.3 per cent in February.

New home sale fell 9.9 per cent in WA, but rose 10.3 per cent in South Australia, and 4.8 per cent in Victoria.

Source: HIA.

The February results are contained in the latest edition of the HIA New Home Sales report, a monthly survey of large-volume home builders in Australia's five largest states.

“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.

"The Aussie housing market is rebalancing," wrote Craig James, chief economist of CommSec in a research paper on the results, noting that prices are moderating, especially in the nation's largest city, Sydney.

"The volume of new sales has been decelerating since residential housing activity peaked in 2016. Residential council approvals remain firm supporting activity, but dwelling commencements are declining," wrote James.

Garrett said, “Tighter restrictions around investor lending and heavier obstacles to foreign investor participation are contributing to the weaker conditions in new dwelling construction.

“New house sales in NSW saw decent growth during February. There were several favourable changes made by the NSW government relating to first-home buyers last year and these have been beneficial to the state’s housing industry," said Garrett.