New home sales past cycle peak: HIA

Following a strong rise in March, only one of the five mainland states experienced growth in detached house sales during April, according to the Housing Industry Association (HIA).

The most recent HIA new home sales report shows that total new home sales declined by 4.7 per cent in April, with detached house sales falling by 3.0 per cent and multi-units by 10.8 per cent.

Victoria was the only mainland state to see detached house sales increase (up by 14.3 per cent) due to a large volume of building during the month.

Meanwhile, Western Australia witnessed the biggest decline in detached house sales – down 19.8 per cent – while NSW suffered an 8.1 per cent drop.

Queensland and South Australia also recorded a decline in detached house sales for April, down 7.8 per cent and 1.3 per cent respectively.

HIA economist Diwa Hopkins said the figures for April reiterate that the peak of the cycle has passed, but the outlook for new home sales is positive.

“The descent we’re now observing is very mild,” she said. “This signals the potential for very healthy home construction activity throughout 2016.”

Ms Hopkins noted that April’s results are in line with what has been predicted for the housing sector.

“The overall trajectory of new home sales is consistent with our long-held expectations for new home-building activity,” she said.

“Our forecasts reflect an expectation that a modest decline in new home building in 2016 will be largely driven by a decline in multi-unit construction, following the successive record levels that occurred in 2015 and 2014.”

[Related: Falling home sales point to property downturn]

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