Sales of new detached houses have declined for the second consecutive month across Australia, despite several key markets experiencing growth.
A 16.4 per cent fall in new home sales in Queensland dragged the national total, while NSW and Victoria saw decent growth during February.
This is the finding from the latest edition of the Housing Industry Association’s New Home Sales report – a monthly survey of the largest volume home builders in the five largest states.
Large falls were seen in Queensland and Western Australia. Queensland’s fall was its largest decline since a slump in June 2017 of 29 per cent.
“The decline in new house sales during the first two months of 2018 is consistent with our expectation that residential building activity will move lower over the next 12 months,” HIA senior economist Shane Garrett said.
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Restrictions on investor lending and foreign buyers are contributing to the weaker conditions in new dwelling construction.
Garrett said that favourable changes made by the NSW government relating to first home buyers have been beneficial to the state’s housing industry. NSW chalked up a 11.7 per cent increase during February.
“Our forecast is that new home sales will trend downwards during 2018 in line with new home building activity. We expect things to bottom out in late 2019 before modest growth resumes.”
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Despite the fact that the overall volume of sales declined during February, reductions only occurred in two of the five states covered by the HIA New Home Sales Report – the magnitude of these reductions outweighed the increases which took place elsewhere.
The largest fall was in Queensland (-16.3 per cent) with a 9.9 per cent contraction recorded in WA. The largest increase in sales was in NSW (+11.7 per cent), followed by SA (+10.3 per cent) and Victoria (+4.8 per cent).