New home sales fell for the third consecutive time in September, according to new data.
According to the HIA New Home Sales report, there was a 3.7 per cent drop in new home sales, reflecting a fall of 3.5 per cent in the persistently weak detached housing segment and a 4.2 per cent decline in the multi-unit market.
"The persistent weakness in new home sales in 2012, driven by the detached house market, primarily reflects another factor conspicuous in its persistence this year – a dire lack of confidence towards housing,” HIA chief economist Harley Dale said.
“Interest rates have come down since November 2011 and there is a recognition that the home-buying environment has improved in 2012. However, households remain reticent to actually make a decision to buy.
"This situation is especially evident in the new home building sector where excessive taxation instils a bias against new housing relative to existing property.
“Interest rate cuts should help foster a recovery in new home sales in the December 2012 quarter, along with new home incentives for first time buyers in three states and a nascent recovery gathering legs in Western Australia.
“The Reserve Bank of Australia needs to play its part by cutting rates again next Tuesday – a renewed easing of rates in October that is not followed up could add to household uncertainty and, perversely, further damage confidence.”