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New home sales finish up weak in 2010

By webmaster
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New home sales eased in December 2010 to finish the year down by 4.4 per cent, according to the Housing Industry Association (HIA).

According to the latest HIA - JELD-WEN New Home Sales Report, a survey of Australia’s major residential builders, the number of new homes sold eased by 0.6 per cent in December 2010.

Detached house sales inched up by 0.3 per cent but the sale of multi-units dropped by 7.3 per cent.

HIA chief economist Harley Dale said the figures confirmed that 2010/11 would be a weaker financial year for housing starts.

“New home sales grew in the December 2010 quarter (up 3.6 per cent) thanks to a strong month in October, but the November rate hikes put a swift closure to any prospect of a sustained improvement,” he said.

The trajectory of interest rates and rate expectations in 2011 would be a key driver of new home sales activity in 2011, Mr Dale said, and indications from the Reserve Bank of a sustained period of interest rate stability was welcome news.

Nevertheless, the new home sector remains plagued by a number of obstacles.

“The policy backdrop unfortunately appears to be tilting away from support for new home building. The latest announcements, including the capping of the NRAS program, signal unfavourable policy directions in terms of boosting new housing supply,” added Mr Dale.

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