A fly has incommodiously landed in the recovery ointment this morning with the release of HIA new home sales, which fell heavily in February down 5.3%:
From the HIA:
New home sales stumbled in February, following four consecutive months of growth, said the Housing Industry Association, the voice of Australia’s home building industry.
The HIA New Home Sales report, a survey of Australia’s largest volume builders, showed that total seasonally adjusted new home sales fell by 5.3 per cent in February, reflecting a 4.0 per cent reduction in detached house sales and an 11.0 per cent drop in multi-unit sales.
“These data are disappointing in the context of the growth in sales over previous months,” said HIA Senior Economist, Shane Garrett. “The broadly based decline in activity during February is a reminder of how delicate the nascent recovery in the housing industry really is,” added Shane Garrett.
“If we take a broader view of the situation, the overall direction of activity is still quite encouraging,” commented Shane Garrett. “New home sales are up strongly over the last three months in almost all states, in terms of both houses and multi-units,” said Shane Garrett.
“Nonetheless, February’s data emphasise how far housing market activity has fallen from the levels of just three years ago. The industry is struggling in the current economic environment and strong policy measures will be required to bring market activity back up to levels consistent with Australia’s long term requirements,” concluded Shane Garrett.
In the month of February 2013 detached house sales fell by 13.7 per cent in Victoria, 2.8 per cent in New South Sales and 6.7 per cent in South Australia. Increases in detached house sales occurred in both Western Australia (+1.9 per cent) and Queensland (+0.8 per cent) during February.
Apartments are volatile and such falls are to be expected from time to time. But new house sales have barely begun to recover before this latest blow. And the falls are broad based. Here is the chart of the rolling annual new home sales which managed to stay just above a new low:
And another for new house sales only by month:
From the ABS we know that new house building approvals haven’t recovered yet at all:
And how are they going to if nobody is buying despite the record fiscal and monetary stimulus in the pipe? One month is not a trend, or a trend break, but it hints that more work will need to be done if the RBA is relying on new house construction to bridge the mining investment cliff.
2013-02 NHSS National Media Release
