Demand for new housing is continuing to wane, with figures showing new home sales fell in May for the second straight month.
Released this week, figures from the Housing Industry Association’s (HIA) May New Home Sales Report show new home sales fell 4.4% in May, a slightly smaller fall than the 4.7% decline seen in April.
The May fall was driven by a fall in sale numbers for new detached dwellings, which declined 6.7% over the month.
New multi-unit dwellings saw a 4.9% increase in sales over the month.
HIA chief economist Harley Dale said there was “nothing alarming” in the overall decline in sales and the slowdown was a predicted part of the residential construction cycle.
“There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards,” Dr Dale said.
“We remain of the view that a decline in new dwelling commencements will gather momentum in 2016/17 and 2017/18, following four years of growth which has delivered enormous benefits to the broader Australian economy,” he said.
“This economic benefit delivered by new home construction in recent years is unprecedented. It creates a platform for the Federal government to provide leadership on the key issues of new housing supply, affordability and home ownership, which will in turn benefit Australia’s economic growth and future standard of living.”
In the month of May 2016 detached house sales declined in three of the five mainland states: New South Wales (-11.5%); Victoria (-8.2%); and Queensland (-11.0%). Detached house sales increased in South Australia (+3.8%) and in Western Australia (+5.4%).
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