30/03/2017 - 11:48

WA house sales to bottom out in 2017: HIA

30/03/2017 - 11:48

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There may have been little growth in new home sales last month Australia wide, but Western Australia helped keep the national figures in positive territory, with an industry figure foreshadowing a bottoming-out in the state over the year.

WA house sales to bottom out in 2017: HIA
HIA expects detached house sales to slowly improve in Western Australia this year.

There may have been little growth in new home sales last month Australia wide, but Western Australia helped keep the national figures in positive territory, with an industry figure foreshadowing a bottoming-out in the state over the year.

Detached house sales increased in just two out of five states in February, with WA sales up 11.3 per cent after a rise of 12.1 per cent in January, according to new data by the Housing Industry Association.

Victoria sales were also higher last month, up 5.1 per cent.

“The HIA New Homes Sales Report – a survey of Australia’s largest home builders – reveals movement of only 2 per cent in February,” HIA chief economist Harley Dale said.

“There was also very little movement in the two sub-series with detached house sales ticking down by 0.1 per cent in February and the sales of multi-units growing by 1 per cent.

“The profiles for HIA detached house sales and Australian Bureau of Statistics detached house building approvals are very similar.

“In the case of detached house sales, over the three months to February this year the volume fell by 2.2 per cent to a level 5.2 per cent lower than achieved over the three months to February last year.”

In its report, HIA said detached house sales in WA increased by 3 per cent in the three months to February, but were still down by 6.3 per cent when compared with the previous corresponding period in 2016.

“ABS private sector detached house approvals increased by 3 per cent in January this year following a contraction of 7.1 per cent in December 2016,” HIA said.

“We think there is a reasonable chance that in coming months both HIA detached house sales and ABS detached house building approvals displays clearer signs of consolidation at the bottom of the cycle.

“What we are likely to see over the course of 2017 is a bottoming out in leading indicators in markets like WA, something that has arguable already begun in the state.”

Mr Dale said the indicator updates today were consistent with a modest reduction in national new detached house starts in 2016-17.

He said the HIA was forecasting a decline in 2 per cent in detached house starts across the country in 2016-17, following a similar-sized fall of 1 per cent in 2015-16.

“As with all aspects of the current housing cycle there are large differences in conditions for detached housing between states and territories,” Mr Dale said.

“HIA’s detached house sales series for the five mainland states has been consistently highlighting this point for some years now.

“In 2017 we expect the profile for leading indicators such as detached house sales to slowly improve for Western Australia and South Australia.

“At the same time the volume of detached house sales on the eastern seaboard is expected to trend lower.”

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