Australian new home sales tumbled to a four-year low in July, driven by a sharp decline in apartment sales.
According to the Housing Industry Association (HIA), total sales fell by 3.7%, adding to the 6.9% fall recorded in June and now sit at the lowest level since August 2013.
The HIA said the decline was driven by a large 15.7% slide in apartment sales, another sign that attempts to limit investor activity in Australia’s housing market from regulators may be starting to bite.
While sales of detached housing fell by a smaller 0.4%, had it not been for a large spike Victoria, that too would have been an ugly reading.
Total sales in Australia’s fastest growing state jumped by 9.8%, offsetting large declines in South Australia (16.2%), Queensland (16.1%), Western Australia (9.1%) and New South Wales (5.2%) during the month.
The strong performance in Victoria may have been due to stamp duty concessions for first-home buyers that began on July 1.
Reflecting the weakness seen over the past two months, total sales volumes over the first seven months of the year were down 4.6% on the same period in 2016.
“This trend is consistent with our expectation that activity will decline modestly from these record high levels over a number of years,” said Tim Reardon, economist at the HIA.
That drop in sales also mirrors a slowdown in building approvals seen over the past year, according to data released by the Australian Bureau of Statistics (ABS) earlier this month.
In trend terms, total approvals fell by 14.9%, driven a massive 26.2% drop in private approvals for attached dwellings.
Over the same period, private house approvals fell by a smaller 2.8%.
Markets will get further information on the outlook for residential construction activity with the ABS set to release its July building approvals report on Wednesday, August 30.