- Australian new homes sales fell for a second month in February.
- The weakness was concentrated in Queensland and Western Australia, masking stronger results elsewhere.
- The HIA is forecasting new housing starts will continue to fall over the next year.
Australian new home sales fell for a second consecutive month in February, driven by a steep decline in Queensland.
According to Australia’s Housing Industry Association (HIA), sales of detached dwellings slipped 0.7% following a 2.1% decline in January, leaving total sales down 1.4% from a year earlier.
It was the first-back-to-back drop reported since September last year.
Despite the headline decrease, the HIA said the national result was largely driven by weakness in Queensland and Western Australia, masking sharp improvements in Australia’s remaining mainland states.
“The largest fall was in Queensland at 16.3% with a 9.9% contraction recorded in Western Australia,” the HIA said.
In contrast, sales rose by 11.7% in New South Wales, 10.3% in South Australia and 4.8% in Victoria over the same period.
The group did not release sales for attached dwellings citing a lack of sufficient data.
“The decline in new house sales during the first two months of 2018 is consistent with our expectation that residential building activity will move lower over the next 12 months,” said HIA Senior Economist Shane Garrett.
“Our forecast is that new home sales will trend downwards during 2018 in line with new home building activity. We expect things to bottom out in late 2019 before modest growth resumes.”
The HIA is forecasting that detached housing starts will bottom out at around 104,000 next year, below the recent cyclical peak of 117,400 set in 2016.