The Housing Industry Association's New Home Sales report has shown a quarterly increase in the number of new home sales, although the figure remains well below what it was at the same time last year.
A quarterly increase in new home sales indicates the market decline may be starting to slow, but does not mean it has bottomed out, the Housing Industry Association says.
The latest HIA New Home Sales report has revealed new home sales for the three months to July increased by 6.1 per cent on the preceding quarter while remaining down by 12.8 per cent compared to this time last year.
The report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future trends in the residential building industry.
HIA Chief Economist Tim Reardon said the small improvement in sales was more a reflection of the distortion created by the federal election rather than a wider stabilising of the market
"There is evidence to suggest that the decline in new home sales that has been underway for more than a year has started to slow, however, this is not an indication that the market is at the bottom of this cycle," he said.
Source: HIA
“New home sales fell in the month of July by 7.2 per cent compare to the previous month and well down from levels experienced earlier this year."
Around the states, new home sales rose in the three months to July 2019 compared to the previous quarter in New South Wales, (+12.7 per cent), Victoria (+5.4 per cent), Queensland (+4.1 per cent) and Western Australia (+9.5 per cent).
South Australia which has managed to withstand the majority of the declines thus far is down by 4.5 per cent in the three months to July 2019 compared to the previous three months but is up by 10.1 per cent compared to the same period last year.
Mr Reardon said the two interest rates cuts, a tax cut and the repeal of regulatory restrictions had not yet flowed through to the home building market.
“These measures, combined with ongoing stable population and employment growth should see new home sales improve toward the end of the year,” he said
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