Sales of newly built, stand alone houses have slumped in Australia’s two major mining states, but the key markets of NSW and Victoria are still growing, the latest research from the Housing Industry Association shows.
New house sales in Australia have now fallen over the first two months of 2018, the HIA’s monthly survey of the biggest home builders by volume across Australia’s five largest states, shows.
It is the first back to back contraction in sales since September last year, the HIA said in its New Home Sales report, released Tuesday.
New detached house sales fell by 0.7 per cent in February, following the 2.1 per cent retreat in January.
But while NSW, Victoria and South Australia all recorded solid gains, Queensland sales fell sharply, down by 16.3 per cent and over in Western Australia sales dropped by 9.9 per cent, the HIA said.
Australia’s largest housing market of NSW experienced a strong 11.7 per cent increase during February as new house sales there have strengthened for most of the past year.
Sales in South Australia lifted 10.3 per cent and in Victoria by 4.8 per cent.
Compared with the same month last year, Sydney sales in February were 20.3 per cent higher.
HIA senior economist Shane Garrett said weaker economic conditions in Queensland are leading to falls in detached house starts this year and next before starting on a recovery during 2020.
The NSW government introduced a First Home Buyers last year, which Mr Garrett said was beneficial to the state’s housing industry.
HIA predicts that overall residential building activity will move lower over the next 12 months.
‘Tighter restrictions around investor lending and heavier obstacles to foreign investor participation are contributing to the weaker conditions in new dwelling construction,’ Mr Garrett said.
The HIA expects new home sales will trend downwards this year in line with new home building activity.
‘We expect things to bottom out in late 2019 before modest growth resumes,’ Mr Garrett said.