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Subdued numbers in new home sales is heralding a downturn in home building to last throughout 2019.
Detailed in the latest edition of the Housing Industry Association (HIA) New Home Sales report, private detached house sales declined by 7.3 in NSW and 7.1 per cent in Victoria, while sales numbers increased by 6.1 per cent in South Australia, 3.8 per cent in Western Australia and 0.7 per cent in Queensland.
Despite the majority of major states rising, the declines in NSW and Victoria tell Diwa Hopkins, HIA economist, new home construction will decline by 10.6 per cent in 2019. However, housing will still be at historically high-levels of 193,600 homes.
“Current measures of the various housing market indicators are still healthy relative to historical averages given the record highs from which they are descending. The pace of the declines so far have also been relatively modest,” Ms Hopkins said.
“For new detached house sales, while the latest level is a non-trivial 27.1 per cent lower than the April 2014 peak, this translates into a very modest average rate of decline during the intervening period of just 0.5 per cent per month.”
After 2019, Ms Hopkins said new house sales could bounce back from their current downturn when HIA data is combed with ABS approvals.
“Housing market conditions of course are not synchronised across the country. Western Australia is showing an encouraging (though very nascent) trend of improvement in conditions,” she said.