Australian new home sales tumble to a 4-year low

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Australian new home sales tumbled in June, falling to the lowest levels in close to four years.

According to Australia’s Housing Industry Association (HIA), sales plummeted by 6.9%, leaving them sitting at the lowest level since October 2013.

From a year earlier they fell by 11.9%.

Source: HIA

The HIA said that sales of multi-units slumped by 10.7% during the month, outpacing a smaller yet equally ugly decline in unattached housing of 5.8%.

For sales in the latter, the HIA said that they tumbled in New South Wales (9.7%), Queensland (29.3%) and South Australia (23.7%), overshadowing strength in Victoria and Western Australia where they increased by 4.1% and 21.1% respectively.

“The reduction in sales of both detached houses and multi-units during the month of June continues the trend underway since sales peaked in early 2015,” said HIA senior economist Shane Garrett.

“These results support HIA’s latest set of forecasts that new dwelling commencements are set to continue easing until late 2018.”

According to the group’s latest forecasts, Australian dwelling starts will decline to around 177,000 commencements in the 2018/19 financial year, well below the record-breaking level of 231,000 seen in the 2015/16 financial year.

Those forecasts are premised on a slump in multi-unit starts which the group expects will slump by 41% from peak to trough, mirroring the recent trend seen in Australian building approvals data.

Markets will get further information on that front this week with the ABS set to release updated building approvals figures on Wednesday.

In May, the ABS said that total building approvals fell by 5.6% to 16,448 in seasonally adjusted terms, leaving them down 19.7% on the levels of a year earlier.

Private-sector dwelling approvals excluding houses — largely units — tumbled by 12.1% to 7,027 over the month, leaving the decline on a year earlier at a mammoth 31.3%.

Private housing approvals fared a little better, increasing by 0.6% to 9,252 for themonth. Still, even with that modest increase, it still left approvals in the category down 6.8% from a year earlier.

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