New home sales have fallen to a 15 year low in August 2012, according to the Housing Industry Association (HIA).
The HIA New Home Sales report, a survey of Australia's largest volume builders, showed a decline of 5.3 per cent in August 2012, reflecting a fall of 5.8 per cent in the detached housing segment and a 2.5 per cent decline in the multi-unit market.
HIA Chief Economist Dr Harley Dale said that new home sales for August were the latest in a string of soft new housing updates for this financial year, following a very weak year for new home building in 2011/12.
"Indeed, following two consecutive years of decline in new housing starts over 2010/11 and 2011/12, and leading indicators pointing to weakness extending into 2012/13, policy settings in August 2012 were clearly inappropriate," Dr Dale said. "A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome."
"It remains the case, however, that rate cuts won't single-handedly generate the new home building recovery Australia requires. Governments have an important role to play in driving reform measures to lower the excessive tax base faced by the sector. In 2012 that reform process remains too slow and in some quarters is virtually non-existent," he added.