Housing Industry Association (HIA) said on Thursday that the slowdown in new home building is likely to linger as new house sales decline.
The level of new detached home sales is now down by 27.1% from the April 2014 high. One consolation, though, is that the number translates into a small average rate of decrease, dropping just 0.5% per month.
“HIA New Home Sales are among a string of housing indicators signalling the national downturn in new home building will continue in 2019,” stated HIA Economist Diwa Hopkins.
“The developments in various housing indicators are affirming our view on new home building activity for 2019.”
HIA is expecting a 10.6% drop in home building for 2019. This would still put home starts at a historically high level of 193,600 homes.
However, Hopkins emphasised that the slides recorded are nowhere near dangerous levels.
“Current measures of the various housing market indicators are still healthy relative to historical averages given the record highs from which they are descending. The pace of the declines so far have also been relatively modest. “
It is also important to note that home market conditions are not the same across the country, most notably in Western Australia, which is beginning to track upwards.
“There are signs particularly from ABS approvals and HIA new house sales that a return to growth in new home building is imminent. For new house sales in particular, WA saw a 3.8 per cent lift in August,” said Hopkins.
“Across the mainland states, private detached house sales in the month of August increase by 6.1% in South Australia, by 3.8% in Western Australia and by 0.7% in Queensland. Private detached house sales declined by 7.3% in New South Wales and by 7.1% in Victoria.”
The aforementioned announcement comes a day after the Australian Bureau of Statistics revealed that home approvals for construction in August were down.
The HIA New Home Sales report is a monthly poll of the largest volume home builders in the five largest states.
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