A new survey conducted by the Housing Industry Association (HIA) reveals that despite recent interest cuts, new home sales rates declined in December.
HIA said new homes sales fell 4.9 per cent in December, seasonally adjusted, following a 6.8 per cent rise in November. According to HIA Chief Economist Harley Dale, new home sales for the quarter remained essentially flat, rising by just 0.2 per cent in the last three months of 2011.
The Reserve Bank of Australia (RBA) reduced the official interest rate by 50 basis points in the last two months of 2011 and economists foresee that it will cut interest rates by 25 basis points this month as well. Mr Dale contributed the decline on new home sales to the increasing “bad news regarding Europe, question marks over labour market prospects in Australia, and avoidable delay and uncertainty as to whether banks were going to pass on the Reserve Bank’s second rate cut,” he said. The survey showed also that detached house sales fell by 7.7 per cent in December but rose by 2.1 per cent over the quarter.
Multi-unit sales jumped 29.4 per cent in the month, but were down 15.7 per cent for the quarter. The volume of detached house sales declined in three out of five mainland states, falling by 4.0 per cent in New South Wales, 10.5 per cent in Victoria, 20.5 per cent in Queensland. Sales increased by 12.0 per cent in South Australia and 6.8 per cent in Western Australia.
