Despite growing signs Australia’s residential construction boom is nearing its end, the sector is showing continued resilience as the sale of new homes recorded a strong jump during June.
The June edition of the Housing Industry Association’s (HIA) New Home Sales report shows sales experienced a monthly increase of just over 8% during June.
According to the HIA, the sale of new detached homes jumped 7.2% in June, while the multi-unit sector saw an increase of 11.5% over the month.
The June increase in new multi-unit sales continued the recovery in the sector after it also saw a 4.9% increase in June.
During June, detached house sales increased in all five mainland states with the largest increases occurring in Queensland (+14.9%) and WA (+9.1%).
Detached house sales increased by 7.5% in NSW, 3.7% in South Australia, and 2.2% in Victoria.
While June was a strong month for new home sales, HIA chief economist Harley Dale said the industry is still predicting an orderly decline over the near future.
“The overall trend is still one of modest decline for New Home Sales, but a bounce of 8.2% in June 2016 highlights the resilience of the national new home building sector,” Dr Dale said.
“The overall profile of HIA New Home Sales is signaling an orderly correction to national new home construction in the short term, as are other leading housing indicators,” he said.
Though the slowdown in the construction industry is not predicted to be a sharp one, Dr Dale said it will play out differently across the country.
“Below the national surface, the large geographical divergences between state housing markets have been a prominent feature of the current cycle – that will continue,” he said.
“Comparing the June quarter this year to the same period last year, detached house sales are down very sharply in South Australia (-21.4%) and in Western Australia (-27.5 %), yet sales are up by 17.0% in Victoria and by 7.1% in Queensland.
“New South Wales rounds off the detached house coverage provided by the New Home Sales report and sales are down by 7.3% on an annual basis.”
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