After increasing in March, the latest New Home Sales Report from the Housing Industry Association (HIA) has revealed that new home sales declined 4.7% during April.
The monthly fall was driven by a fall in sales across all dwelling types, with detached sales down 3%, while multi-unit sales fell 10.8%.
Source: HIA
While the cycle’s peak may now be in the rear-view mirror for the residential construction industry, HIA economist Diwa Hopkins said the slowdown will not be dramatic.
“The trend in new home sales reiterates that the peak for the cycle has passed, but the descent we’re now observing is very mild,” Hopkins said.
“This signals the potential for very healthy home construction activity throughout 2016, much as we have been anticipating,” she said.
Hopkins said the immediate outlook for the industry fits with long-term forecasts, with larger impacts to be felt in the apartment sector.
“This overall trajectory of total new home sales is consistent with our long-held expectations for new home building activity.
“Our forecasts reflect an expectation that a modest decline in new home building in 2016 will be largely driven by a decline in multi-unit construction, following the successive record levels that occurred in 2015 and 2014.”
In the month of April 2016 detached house sales declined in four of the five mainland states: Western Australia (-19.8%); New South Wales (-8.1%); Queensland (-7.8%) and South Australia (-1.3%). Only in Victoria did detached house sales increase (+14.3%).
