After reaching their highest level in over two years in September, new home sales dropped back in October 2013 said the Housing Industry Association, the voice of Australia’s residential building industry.
“We shouldn’t make too much of one monthly fall in new home sales, following on as it does from two strong results which led to the highest volume since June 2011,” commented HIA Chief Economist, Dr Harley Dale.
“Over the three months to October 2013 the volume of detached house sales increased in all five surveyed states, while the downward trend evident in multi-unit sales since late last year looks to be reversing,” Harley Dale said.
“That’s a good profile for a leading indicator of new home building activity heading into the end of the year,” remarked Harley Dale.
The HIA New Home Sales report, a survey of Australia’s largest volume builders, showed that total seasonally adjusted new home sales fell by 3.8 per cent in October 2013 following a rise of 6.4 per cent in September. In October this year there was a decline of 4.6 per cent in detached house sales which followed two consecutive monthly gains. Meanwhile the sales of multi-units turned in growth of 1.4 per cent in October, a very good result given the 19.9 per cent jump recorded for the previous month.
“It will be important to observe a second leg of upward momentum to new home sales in the months ahead. This outcome would signal further growth in new residential construction activity in 2014 in what will remain a very low interest rate environment,” noted Harley Dale.
In the month of October 2013 private detached house sales increased by 17.4 per cent in South Australia and rose by 3.3 per cent in Queensland. Detached house sales fell in October in New South Wales (-4.6 per cent), Victoria (-13.2 per cent), and Western Australia (-1.2 per cent). Over the three months to October 2013, detached house sales increased in all five surveyed states. The largest increase over the three months to October this year was in South Australia (+10.5 per cent), followed by Victoria (+6.0 per cent), Western Australia (+5.3 per cent), Queensland (+5.1 per cent), and New South Wales (+2.0 per cent).
Looks more like a peak to me. New dwelling finance hasn’t grown in six months:
We need bigger, stronger house price rises. Hurry!
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
