Monthly decline, but new home sales still performing strongly

By |
New figures from the Housing Industry Association (HIA) have shown the sale of new homes in Australia remains strong, despite still siting below peak levels.

According to the HIA’s New Home Sales Report for October, there was a 3% decline in the total number of new homes sold over the month, with detached house sales falling 4.1%, while sales in the multi-unit sector increased by 1%.

With the HIA having long said the peak of the current construction cycle has passed, the October figures have not come as any surprise.

“New home sales are not far below their historically high peak, consistent with only a moderate decline in dwelling commencements in the short term," HIA chief economist Harley Dale said.

“Within the aggregate profile, detached house sales are up over the three months to October in all three eastern seaboard states,” Dr Dale said.

Source: Housing INdustry Association

Despite the industry being on the other side of its peak, the housing sector is likely to continue to perform strongly over the coming year.

"New dwelling commencements have increased over three consecutive years to a record high. Leading indicators like new home sales and ABS building approvals suggest a fourth healthy year in 2015/16," Dr Dale said.

"That's an impressive outlook which will remain of considerable value for the wider Australian economy, given that a peak in new housing tends to be immediately followed by a sharp decline.”

While 2015/16 is predicted to be another strong year for the industry, there are indicators that an accelerated slowdown could be seen in the sector after that.

“The risk will emerge ahead of 2016/17,” Dale said.

“The lagged effect of slowing population growth and the unprecedented uncertainty around higher rise construction is unfortunately being exacerbated by higher variable mortgage costs and a broader reach for investor credit rationing than required.”

Do you have more than $120k in your super fund? You could use your super to buy property - Find out how

Top Suburbs : willoughby east , nundah , trott park , tweed heads south , millner

go back

Get help financing your investment

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here