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New home sales continue to slide

New home sales continue to slide

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Staff Reporter

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.”

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New home sales continue to slide
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