.jpg)
By
Sales of new homes jumped 2% in June marking the first increase this year, according to HIA principal economist Tim Reardon. However, additional data showed that sales for the entire 2017/18 fiscal year were 5.3% lower than in the previous year.
The June increase is small compared to the drop in sales that happened throughout 2018. New home sales for the first six months of 2018 were down by 2.9% compared in the last six months of 2017.
Reardon said that the fiscal year’s sales decline reflects the shifts in housing market conditions. Credit availability has tightened over the past 12 months as banks respond to the house prices decline and royal commission.
But even after the slowdown, overall building activity stays high compared to the past decade. New homes sales increased in all states other than Victoria, which remains in decline since February 2018. The decline is “well overdue” because the state’s market activity has remained well in excess of growth over recent years.
New home sales in other states, particularly NSW, are a welcome reprieve, according to Reardon. New home sales in NSW were lower by 13.3% in 2017/18 than last year. The sales picked up in June 2018 by 8.3% compared with the previous month. Home sales in Queensland rose by 2.7%, WA by 1.5%, and SA by 0.2%.
“ABS data shows approvals for private sector detached houses fell dramatically in May 2018. Approvals data typically trails the new home sales data by three to six months and the dramatic fall in approvals in May is likely to be reflected in the June data,” Reardon said.
