The latest building approval figures from the Australian Bureau of Statistics show the new home market is yet to see a pick-up in activity despite improved conditions in the established home market, the Housing Industry Association says.

Released on Tuesday, the ABS data indicated detached house approvals in August decreased by 2.6 per cent compared with July, and approvals throughout the three months to August were down by 16.0 per cent compared to the level a year ago. 

In seasonally adjusted terms, building approvals in August 2019 were up in New South Wales (+10.6 per cent), Victoria (+6.5 per cent), Tasmania (+4.4 per cent) and Western Australia (+4.2 per cent). There were significant falls in both Queensland (-21.4 per cent) and South Australia (-29.7 per cent). In trend terms, approvals in the Northern Territory declined by 8.7 per cent while the ACT dropped by 27.7 per cent. 

At a glance:

• Data from the Australian Bureau of Statistics has indicated detached house approvals in August decreased by 2.6 per cent compared with July, and approvals throughout the three months to August were down by 16.0 per cent compared to the level a year ago.
• At the same time, the Housing Industry Association's New Home Sales report indicated sales rebounded by 7.3 per cent in August, following a weak result in July.
• New home sales in the winter months were 4.6 per cent below the level recorded a year ago.

The release of the ABS data comes after the HIA published its monthly New Home Sales report, surveying largest volume home builders in the five biggest states.

The report indicated sales rebounded by 7.3 per cent in August, following a weak result in July.

Despite the improvement in August sales, new home sales in the winter months were 4.6 per cent below the level recorded a year ago.

HIA Senior Economist Geordan Murray said the figures reflected the "tail end of the housing downturn". 

“Throughout the remainder of 2019 the new home market should start to reflect the lower interest rate environment following the RBA’s cuts to the official cash rate," he said.

"The modest lift in home prices over recent months has led to improved confidence and is likely to result in increased activity amongst investors. 

“These factors together should assist the housing market at the back end of 2019."

Click here to download a copy of the Housing Industry Association New Home Sales report.

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