- Sales of newly-constructed houses in Australia fell for a third consecutive month in March.
- According to data released by the ABS, private sector housing approvals have increased by 6.1% over the past 12 months.
- Australia’s March building approvals report will be released on Thursday, May 3.
Australian new housing sales fell for a third consecutive month in March, according to data released by the Housing Industry Association (HIA).
The group said sales of detached housing fell 2% in March in seasonally adjusted terms, adding to a 0.7% decline reported in February.
It did not release data on newly-constructed apartment sales.
As seen in the chart below, sales have now fallen every month since the start of 2018, bucking the trend seen in separate data on building approvals released by the ABS.
Over the month, new house sales fell in three of the five markets covered by the report.
The largest decline occurred in South Australia at 11.4%, followed by New South Wales and Victoria where sales slid by 10.2% and 7.2% respectively.
Western Australia and Queensland managed to buck the trend, recording gains of 26.2% and 2.7% respectively over the month.
The HIA put the weakness in New South Wales and Victoria — Australia’s largest housing markets — down to tighter restrictions on investor lending, offsetting a resurgence in first home buyer activity helped by stamp duty discounts introduced by both state governments in 2017.
“The reduction in new house sales in Sydney and Melbourne is likely to be the result of tighter lending policies for investors being imposed by APRA,” it said.
“There has been a welcome increase in first home buyers participation which has partially offset the fall in investor involvement in the market.”
Despite a recent lift in approvals to build new houses, an outcome that suggests new home sales should increase in the months ahead as dwellings are completed, the HIA says housing construction is likely to weaken as we head towards the second half of 2018.
“HIA’s new house sales index is a leading indicator of activity on the ground,” says Shane Garrett, HIA senior economist. “Based on today’s results, new house building activity is likely to move lower on a national basis over the next few months.”
Markets will get further information on the outlook for residential construction activity with the ABS set to release building approvals data for March on Thursday, May 3.
In February, total approvals fell 6.2% in seasonally adjusted terms, leaving the decline on 12 months earlier at 3.1%.
Private-sector non-housing residential approvals — largely capturing apartment approvals — slumped by 16.4% over the month, taking the decline on a year earlier to 14.8%.
In contrast, private sector housing approvals rose by 1.9% in February. That left the increase on February 2017 at 6.1%.
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