The HIA New Home Sales Report, a survey of Australia’s largest volume builders, shows a lift in sales in August following a weak July result.
“While an overall downward trend in total seasonally adjusted new home sales is still apparent, the increase of 3.3 per cent in August 2014 means that this decline is quite modest,” said HIA Economist, Diwa Hopkins. “Despite the August bounce, we still hold the view that new home sales reached their peak for the cycle back in April this year.”
“The result for August was driven primarily by a strong lift in the volatile ‘multi-units’ sector where sales increased by 19.8 per cent, taking this component of sales to its second highest level this cycle.”
“Detached house sales didn’t fare quite so well, ticking up by only 0.5 per cent, although this slight rise arrested a decline which stretched to three consecutive months.”
“As leading indicators of new home construction activity, both HIA New Home Sales and ABS Building Approvals are displaying a moderate downward trend. Current levels remain elevated by a historical standard, which is consistent with still healthy levels of new home building throughout 2014/15.”
“It is important for the new home building sector and the broader domestic economy that we continue to see evidence of historically high levels of building approvals and new home sales throughout 2014 and into next year, even if the peak for these indicators has passed,” concluded Ms Hopkins.
In the month of August 2014 detached house sales increased by 11.1 per cent in New South Wales and by 2.0 per cent in Western Australia. Detached house sales fell by 6.8 per cent in South Australia, 6.0 per cent in Victoria and 0.7 per cent in Queensland. Over the three months to August 2014 detached house sales decreased in each of the surveyed states, albeit to varying degrees, with the exception of NSW where sales increased by 0.4 per cent. Sales fell by 9.8 per cent in Victoria, 4.6 per cent in Western Australia, 4.4 per cent in South Australia, and by 3.2 per cent in Queensland.