New home sales slumped to a 17 month low in June, adding further weight to the case for the Reserve Bank of Australia keeping interest rates on hold at their board meeting tomorrow.
The latest Housing Industry Association (HIA) – Jeld-Wen New Home Sales Report, which surveys Australia’s major residential builders, showed that new home sales fell by 5.1 percent in June, falling to a 17 month low with new home sales not at levels this low since January 2009.
HIA Chief Economist, Dr Harley Dale, attributed the slump in new home sales to the winding back of monetary and fiscal policy stimulus by the RBA and Federal Government, which is slugging first home buyers buying new homes considerably.
“Lack of readily available land and hefty infrastructure charges have combined with a chronic lack of development finance to put the brakes on sales and development activity,” said Harley Dale.
“Concerted action is required to reduce the impact of regulation, development charging, and excessive taxation on the cost of new housing supply. Inaction means that Australia’s dwelling shortage will continue to increase, pushing up existing house prices and disadvantaging households seeking to purchase or rent a dwelling.”
The HIA – Jeld-Wen New Home Sales Report numbers would have been worse had it not been for a spike in sales for the volatile multi-unit sector which increased by 10.3 perccent in June, detached housing sales fell by 6.6 percent during the same period.
In the month of June 2010 detached new home sales fell by 10 percent in Victoria, 5.2 percent in Western Australia, 5.1 percent in Queensland, 4.2 percent in South Australia, and 2.2 percent in New South Wales.
