HIA new homes sales for October are out and are clearly past the peak, other than a freakish spike in WA that looks rather like a one-off:
Total seasonally adjusted new home sales increased by 3.0 per cent in October 2014 following a flat result in September. Detached house sales recorded a healthy increase in Victoria (+4.7 per cent) and a very strong rise in Western Australia (+24.8 per cent), which drove total detached house sales up by 6.0 per cent in the month. Multi-unit sales dropped by 10.5 per cent in October, following growth of 11.0 per cent in September.
After a relatively sharp decline of 5.7 per cent in July, driven by both detached houses and multi-units, total new home sales have mounted a modest recovery. Sales are still off their cyclical peak reached back in April this year and we remain of the view this result will not be usurped. For the record, ABS private sector building approvals peaked in January 2014. The overall volume of new home sales is still at an elevated level which augurs well for healthy new home building activity persisting into 2015.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
