New home sales have recorded a fall for the first time in five months and may be at or near their peak, according to the Housing Industry Association (HIA).
The New Home Sales Report, a survey of Australia’s largest volume builders, shows a fall of 4.3% in May.
“The overall profile for new home sales is a healthy one, given that May marks the first decline in new home sales this year,” says HIA Chief Economist Harley Dale.
Sales grew by 3.8 % over the three months to May 2014 to be up by 21% compared to the same period in 2013.
“Further upward momentum may be a challenge and it is a distinct possibility that new home sales have peaked for the cycle,” says Dr Dale.
Detached house construction has the potential to grow faster in 2014/15 than in 2013/14 but land supply constraints are an issue especially in Sydney and Perth.
“Inadequate land supply is one prominent example of supply side constraints preventing new home construction reaching its full potential, highlighting the need for a focus on housing policy reform,” he says.
Detached house sales fell by 2.2% in the month of May, but over three months were still up by 5.7%. Sales of multi-units also fell in May, a sharp 16.1%.
Private detached house sales increased by 3.3% in Victoria and inched up by 0.5% in Queensland.
Monthly sales of detached houses fell by 6.7% in Western Australia and were down by 5.8% in South Australia and by 5.4% in New South Wales.
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