New home sales continue to slide

New home sales continue to slide

31 October 2012 by Staff Reporter 0 comments

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.”

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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