New home sales are continuing to decline in Western Australia, falling 5.6 per cent in September, according to the latest report from the Housing Industry Association.
The HIA said private detached home sales had been falling since midway through the year, with the level of transactions in the September quarter 8.5 per cent lower than the June quarter.
The reduction in home sales, coupled with a 3.7 decline in approvals in August, suggests the sector may have hit its peak in June, the HIA said.
“Beyond this peak, the key question is whether WA will be able to avoid the severe volatility that the residential construction sector has had to withstand in the past,” the HIA said.
“The current trajectory of sales and approvals is encouraging on that front, suggesting a ‘soft landing’.
“Furthermore, broader conditions – low lending rates, continued house price growth and still a backlog of pent-up underlying demand – are supportive of new house building activity remaining healthy in 2014-15.”
Nationally, the HIA said a clear upward trend had emerged in multi-unit sales, with most of the increase attributed to apartments, but townhouse style dwellings also lodged a solid lift.
The HIA said multi-unit sales were up 11 per cent in the month of September across Australia, contributing to a flat result in the month for overall new home sales.
“A moderate decline in detached house sales has been driving an overall loss of momentum in new home sales,” HIA chief economist Harley Dale said.
“Conversely, sales of multi-units have gained a second wind since June this year, driven by both apartments and semi-detached/townhouse product.”
Seasonally adjusted detached house sales fell by 2.3 per cent in September, to be down 6.5 per cent for the quarter.
“The overall profile for new home sales is consistent with a healthy year for dwelling construction in 2014-15,” Dr Dale said.
“It would be desirable to see that outcome in detached and low density construction in addition to the high-rise sector.”
