New home sales are seeing signs of stabilisation in the first quarter of 2019, new data showed.
According to Geordan Murray, senior economist of the Housing Industry Association, new home sales have stabilised in the first three months of 2019 after falling by 8.5 per cent in 2018.
Outlined in the HIA New Home Sales report, the data from the five largest states reveals an insight into how the property market may move in the future.
The majority of the five largest states saw new home sales rise, with South Australia leading the charge at 8.6 per cent, followed by NSW at 4.8 per cent and Western Australia at 2.3 per cent.
Meanwhile, Queensland saw the sharpest decline at 4.7 per cent, followed by Victoria with a decline of 2.9 per cent.
“Given the rapid decline in new home sales throughout 2018, this moderation in the fall in new home sales suggests that the credit squeeze is easing as the market adjusts to the new lending norms,” Mr Murray said.
“The credit squeeze impacted the market at a time when the natural housing cycle was already beginning to cool. Banks reduced the amount of money they were willing to lend, and the time it took to get a loan approved blew out. The market is now showing signs of adjusting to the new levels of lending.
“There is uncertainty surrounding the federal election, which typically subdues new home sales and approvals as investors and owner-occupiers put decisions on hold until after the election. The election result will rectify this uncertainty, but the potential for higher taxes on housing means a post-election rebound in sales may not eventuate.”