In each of the country’s top five property markets, new house sales declined over the month of April.
Compared to this time last year, new house sales are down 3.1 per cent, according to the Housing Industry Association’s (HIA) New Home Sales report and principal economist Tim Reardon.
Despite the decline however, new house sales are still at elevated levels.
The biggest decline was noticed in Western Australia by 11.6 per cent, followed by NSW at 8.2 per cent, then Queensland at 2.9 per cent, South Australia at 1.7 per cent and Victoria at 0.1 of a percentage point.
“New home sales were strong through most of 2017 and the fall back in sales reflects a modest slowdown in demand from both owner occupiers and investors,” Mr Reardon said.
“The market is well past the peak of activity but overall the market remains at elevated levels.”
The biggest issue for new house sales, Mr Reardon said, was that accessing finance has become more difficult, as banks become more cautious as house prices decline. Collateral requirements rising has followed, which Mr Reardon claimed is an “obvious reaction to falling house prices, as banks seek to minimise risky loans”.
“This is in addition to the lending constraints on investors that have been in place for over a year.
“The value of housing loans to investors peaked in August 2017 at $152.7 billion in the preceding 12 months. Since then investor loans have been falling quite steadily to $144.2 billion over the year to March 2018. This represents a reduction of 5.6 per cent on last August’s peak.”
In order to see improvement in new home sales, risks in the current market need to be balanced against the strong population and employment growth rates and the improving state of the economy, Mr Reardon said.