New home sales lift in August – but still trending down
New home sales increased by 9.1% in August month as a result of very strong results in Victoria and Western Australia, however, over the year sales have continued to slow according to HIA’s Principal Economist, Tim Reardon.
The HIA New Home Sales report - a monthly survey of the largest volume home builders in the five largest states – provides a leading indicator of building approvals and activity in the building industry.
“The jump in sales in July confirms our forecast of a slowdown in building activity through until 2018/19. The increase in sales in August offsets larger declines in sales in recent months, but it is not sufficient to reverse the decline in sales that is evident since early 2016.”
“Results in July and August have been affected by government interventions in NSW and Victoria which have seen first home-buyers returning to the new home market.
“Victoria has seen record numbers of new building approvals and new home sales are continuing to drive even higher. Strong population growth and employment growth, fortified with enhanced first home buyer incentives, is prolonging the boom in building activity.”
For the three months to August compared with the same period last year, house sales in Victoria are 15.7% higher and up by 9.2% in South Australia.
Over the same period, sales declined in Queensland (-7.3%), WA (-15.4%), NSW (-17.4%) and Queensland (-37.9%).
“The trend in new home sales continues to provide a strong leading indicator of the trend in residential building approval figures from the ABS as can be seen in the chart below,” Mr Reardon said.