Australian new home sales fell heavily for a second consecutive month in May.
According to the latest New Home Sales Report, released by the Housing Industry Association Group (HIA), sales fell by 4.4% in May, following a 4.7% drop in April.
Reversing the trend of the previous month, the weakness in May was concentrated in detached housing sales, which fell by 6.7%. Multi-unit sales jumped by 4.9%.
Sales of detached housing in New South Wales, Victoria and Queensland — Australia’s most populous states — fell by 11.5%, 8.2% and 11% respectively.
That was partially offset by gains of 3.8% and 5.4% in South Australia and Western Australia.
To Harley Dale, chief economist at the HIA, the trend of the past two months is likely to be repeated in the period ahead.
“There is nothing alarming to a reversal in the trend for new home sales,” says Dale. “There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards.”
On Monday next week, the Australian Bureau of Statistics will release updated building approvals figures for May.
Approvals have increased in four of the past five months, bucking widespread expectations of a slowdown following a record-breaking year in 2015.
Many look to the report as a guide on future levels of housing construction, and as a consequence new home sales.