New home sales drop to two-year low

The Housing Industry Association’s monthly survey of Australia’s largest home builders found that new home sales fell by 8.5 per cent during October this year.

HIA senior economist Shane Garrett noted that this fall has brought new home sales to their lowest volume since July 2014.

“Sales on both sides of the market saw sizeable reductions during October,” he explained. “Detached house sales were down by 8.2 per cent during the month, while multi-unit sales fell by 9.2 per cent.”

Mr Garrett remarked that the reduction in the volume of new home sales is “not unexpected”, given that Australia is nearing the end of its “longest and strongest” new home building upturn.

“October’s new home sales results are consistent with HIA’s latest forecasts for new home building starts which foresee a reasonably marked reduction in activity over the next couple of years,” Mr Garrett said.

“Even so, activity is projected to fall to a low point of around 172,000 new dwellings starts during 2018/19, about the same as the average of the past decade."

The report showed that during October, detached house sales fell in three of the five mainland states.

Victoria saw the largest reduction during the month (-20.4 per cent), followed by Western Australia (-5.6 per cent) and NSW (-2.8 per cent).

Meanwhile, new detached house sales rose by 4.5 per cent in Queensland during the same period, and South Australia also reported a slight increase of 0.8 per cent.

[Related: Home sales make ‘partial recovery’ in August]