New home sales increased last month, marking the first hike of 2018, according to latest data from the Housing Industry Association (HIA).
HIA’s Principal Economist Tim Reardon said that new home sales rose 2% two months ago. But despite this growth, new home sales for the entire 2017-2018 financial year were still 5.3% lower than in the preceding financial year.
“The increase in sales in June is small in comparison with the fall in sales that has occurred throughout 2018. New home sales for the first six months of this year are 2.9% lower than in the last six months of 2017,” Reardon noted.
The slowdown of sales over the year is an indication of changes in housing market conditions, the report stressed. For example, the past year saw the tightening of credit availability given as banks had to adjust to the decline in home prices and scrutiny from the Banking Royal Commission.
Data also revealed that new home sales surged in all states except Victoria. The state has been recording falls since February, and it declined a further by 0.4% in June.
“Activity in the Victorian market has reached record levels over recent years and has remained elevated well above historical trends and well in excess of growth in other states. “
“The decline in sales in Victoria is well overdue. “
On the brighter side, new home sales in the other states, specifically New South Wales (NSW), were up last June, 8.3% higher thanthe previous month. For reference, sales in NSW were 13.3% lower in 2017/18 than 2017.
Across the other markets, new home sales also rose in Queensland (2.7%), Western Australia (1.5%), and South Australia (0.2%).
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