.jpg)
New home sales have shown the first quarterly improvement since December 2017.
HIA chief economist Tim Reardon explained that despite the June quarter sales being up just 0.8% on the preceding quarter, it is notable in that it marks a change in trajectory.
He said, “Over the year to June 2019, new home sales fell 12.4% compared with the previous financial year, with every state recording a sharp contraction in sales.
“The small improvement in sales in the June quarter, suggests that the decline in new home sales that has been underway for more than a year, has started to ease,” he added.
As compared to the previous quarter, new home sales for the June quarter were up by 5.1% in Victoria, 2.9% in Western Australia, and 2.6% in South Australia. Conversely, sales declined in New South Wales by 1.7% and Queensland by 8.9%.
According to Reardon, “Two interest rates cuts, a tax cut and repeal of regulatory restrictions will encourage increased activity in 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 added.
The most recent auction clearance rates also suggest market stabilisation, with the weighted average clearance rate improving over each of the last four weeks. The figure has rested above the mid-60% range for the last month, a significant improvement from the 50-55% the same time last year.
The two largest auction markets, Melbourne and Sydney, both had high preliminary clearance rates this past week at 74% and 78.5% respectively.
While the year on year volume is still down, there were 1,115 homes taken to auction across the combined capital cities this week, up from the 896 homes the week before.
