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New Home Sales Signal Soft Home Building Recovery

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New Home Sales Signal Soft Home Building Recovery

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									                                                                                                                                                                              30 November 2009

       New Home Sales Signal Soft Home Building Recovery
According to the latest Housing Industry Association (HIA) survey of Australia’s largest builders,
the number of new home sales fell for a second consecutive month in October following a first
time buyer surge in August.

New home sales fell by 6 per cent in October, pushed lower by higher interest rates and
softening first home buyer activity said Dr Harley Dale, HIA’s Chief Economist.

“Sales activity from investors and upgrade owner occupiers has not chimed in to offset
weakening first home buyer-related activity.

“A decent and sustainable new home building recovery needs strong momentum from private
sector trade-up buyers and investors and we seem to be falling short on that score as we near
the end of 2009.

“Indeed, given the narrowly based private sector recovery, costly delays in planning approvals,
and reports of land shortages beginning to re-emerge, it is looking like 2010 will be a year where
the number of new homes built will fall well short of what is required to match Australia’s rapidly
growing population. The majority of the increase in housing starts next year will be driven by the
social housing program which is not pulling the private sector along with it,” said Harley Dale.

The number of sales of detached houses fell by 6.9 per cent in October following a decline of 4.3
per cent in September. The number of apartment sales increased by 2.4 per cent in October, the
fourth rise in six months, but the volume remained at a historically very low level.

Detached New Home Sales in October fell by 12.1 per cent in New South Wales and were down
by 4.2 per cent in Victoria, 9.1 per cent in Queensland, 7.2 per cent in South Australia, and 3.4
per cent in Western Australia.

                                                                 New Private Dwelling Sales - Australia
                                                                                       Seasonally Adjusted


           10,500                                                                                                                                                                                16,000

           10,000                                                                                                                                                                                14,000

            9,500
                                                                                                                                                                                                 12,000

            9,000
                                                                                                                                                                                                 10,000
                                                                                                                                                                                       -6%
            8,500
                                                                                                                                                                                                 8,000
            8,000
                                                                                                                                                                                                 6,000
            7,500

                                                                                                                                                                                                 4,000
            7,000

            6,500                                                                                                                                                                                2,000


            6,000                                                                                                                                                                                0
                                      Feb-07




                                                                                             Feb-08




                                                                                                                                                   Feb-09
                                               Apr-07




                                                                                                      Apr-08




                                                                                                                                                            Apr-09
                             Dec-06




                                                                 Aug-07



                                                                                    Dec-07




                                                                                                                        Aug-08



                                                                                                                                          Dec-08




                                                                                                                                                                              Aug-09
                                                        Jun-07




                                                                                                               Jun-08




                                                                                                                                                                     Jun-09
                    Oct-06




                                                                           Oct-07




                                                                                                                                 Oct-08




                                                                                                                                                                                        Oct-09




          Source: ABS 8731.0 and HIA                                      HIA New Home Sales (LHS)                                    ABS Dwelling Approvals (seas adj) (RHS)




For further information please contact:
Harley Dale, Chief Economist on 0414 994 186
Website: http://economics.hia.asn.au
***For a full copy of the New Home Sales Report (media only) or for an annual subscription, please contact Kirsten Lewis on (02) 6245 1393 or
k.lewis@hia.com.au

								
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