New home sales are down, but far from out.

New home sales recorded a steep decline of 5.3 per cent nationwide in February 2016 say the Housing Industry Association –HIA.

HIA Chief Economist, Dr Harley Dale said “This latest result is a larger than desirable fall, “HIA New Home Sales are losing some of their lustre as a downward trend becomes more firmly entrenched.”

“New home sales are down, but far from out. Over the three months to February 2016, the sale of detached houses increased by 1.8 per cent. The sale of multi-units nudged up by 0.8 per cent over the same period.”

“What we need to keep a watchful eye on are the signals that will shortly begin to emerge for 2016/17 from key leading housing indicators like new home sales and building approvals.”

As mentioned in a previous new builds are expected to fall over the next two years from levels of 220,000 new dwelling in 2015 to around 160,100 new builds by the end of financial year 2017/2018.

Harley Dale went onto also say “HIA new home sales are losing some of their lustre as a downward trend becomes more firmly entrenched. “While the monthly result is a soft one, there is no need to loudly ring alarm bells as often seems to automatically occur every time an economic update disappoints.”

The HIA report showed that February saw a big drop of 10.6 per cent in the sale of units while detached houses dropped 3.9 per cent. Queensland had the biggest decline in detached house sales which was down 12.1 per cent followed by NSW with a 7.4 per cent drop, South Australia, WA and Victoria had declines of 3.5. 1.8 and 1.7 per cent respectively. Unfortunately there wasn’t enough data for unit sales by state.

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