Australian new home sales hit a 15-year low in August, with transactions for new dwellings in Western Australia dragging the nation down with a 9.4 per cent plunge.
According to the Housing Industry Association, new home sales dropped 5.3 per cent nationwide to 5,383 in August from 5,682 in July to reach their lowest point since 1997.
Sales of detached houses fell in all states in August, with the largest declines in WA (9.4 per cent), New South Wales (7 per cent) and Victoria (8.6 per cent).
Overall, detached housing sales fell 5.8 per cent in the month, and multi-unit sales fell 2.5 per cent.
Continued weakness in home sales indicated yesterday's rate cut by the Reserve Bank of Australia came not a moment too soon, HIA chief economist Harley Dale said.
"New home sales for August are the latest in a string of soft new housing updates for this financial year, and that follows a very weak year for new home building in 2011/12," he said.
"A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome."
But cash rate easing was not the only action needed to boost the housing sector in Australia, Dr Dale said.
"Governments have an important role to play in driving reform measures to lower the excessive tax base faced by the sector," he said.