From the HIA comes the December new homes sales report, which posted a nice bounce and made up some ground on prior month’s falls:
The HIA-ACI New Home Sales Report, a survey of Australia’s largest volume builders, showed a bounce back in December 2015 following three consecutive months of decline.
“Total seasonally adjusted new home sales finished last year strongly, recording a 6.0 per cent increase in December,” said HIA Chief Economist, Dr Harley Dale.
“The headline monthly rise in December 2015 is a result driven, encouragingly, by both the detached house and ‘multi-unit’ segments of the market,” Harley Dale said. “Private detached house sales increased by 2.2 per cent, while multi-unit sales jumped by 21.1 per cent.”
“Key leading indicators of new home building such as HIA-ACI New Home Sales and ABS Building Approvals and new housing finance are consistent with very healthy national construction volumes persisting throughout the first half of 2016,” noted Harley Dale. “These indicators are also signalling a continuation in 2016 of very large differences in new housing conditions across the states.”
“The updates we receive for leading indicators in coming months will be closely watched to determine the magnitude of any risk that the second half of 2016 is materially weaker for new home building than the first half of the year,” concluded Harley Dale.
In the month of December 2015 detached house sales increased in three of the five mainland states: Queensland (+5.2 per cent); Western Australia (+5.0 per cent); and Victoria (+1.1 per cent). Sales declined in South Australia (-2.1 per cent) and (just) in New South Wales (-0.1 per cent). During the December 2015 quarter detached house sales increased in Queensland (+4.3 per cent) and NSW (+0.3 per cent). Sales declined in WA (-15.4 per cent), SA (-10.2 per cent) and Victoria (-4.0 per cent).
Once again, dwelling approvals peaked in April 2015 and have fallen by nearly 8% since then:
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Approvals are also now falling in rolling annual terms:
The residential construction peak is fast approaching, boys. Expect construction to turn down over the second half and continue into 2017.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
