Sales activity in the property market continues to decline, with residential sales falling 21.8 per cent in the 12 months to December 2010.
According to new data from the Real Estate Institute of Australia, the number of sales fell 10,353 from 47,597 in the December quarter 2009 to 37,244 in the December quarter 2010.
REIA presidenty David Airey said a relationship could be drawn between the decline in sales, the phasing out of the First Home Owners Grant Boost (FHOG Boost) and higher interest rates.
“As noted in the Reserve Bank of Australia Board meeting minutes for March 2011, the Reserve Bank has achieved their goal of stabilising property prices with successive increases in 2010. As well as interest rates rises, we have seen the impact of the phasing out of the FHOG Boost at the end of 2009 and a slowing in construction of new housing,” he said.
“Without first home buyers, market activity will continue to decrease and new home sales will continue to slow. This ultimately affects the established home sales market.”
Mr Airey said he was currently calling on the government to engage with the various industry bodies to create initiatives that will stimulate housing activity.”