New home sales recovery is stalling

The HIA’s new home sales September release shows a rebound from a two month slump today:

New home sales increased in both the month and quarter of September 2013, said the Housing Industry Association, the voice of Australia’s residential building industry.

“Total new home sales reached their highest level in over two years in September 2013,” said HIA Chief Economist, Dr Harley Dale. “Given the recovery in sales is occurring from a record low and that the upward momentum appeared to be stalling in mid-2013, this September outcome is very positive.”

The HIA New Home Sales report, a survey of Australia’s largest volume builders, showed that total seasonally adjusted new home sales increased by 6.4 per cent in September 2013, the fastest monthly growth since April last year. The increase reflected a 4.5 per cent rise in detached house sales and a 19.9 per cent jump in multi-unit sales.

“There is clear upward momentum in detached house sales which grew by 3.7 per cent in the September 2013 quarter to be up by 25.2 per cent when compared with the same quarter last year,” noted Harley Dale. “Sales of multi-units fell by 5.7 per cent in the quarter and were largely flat compared with the same period in 2012.”

The HIA has done a good job of putting lippy on a pig. If we break up this result, the recovery in sales appears to be stalling. Much of the nice jump in the headline figure was in apartments, which remain in a downtrend:

Detached houses did climb:

But all of the growth was driven by the big Victorian bounce on the shift in its FHOG programs to new houses. This will wane in coming months. NSW and SA new home sales have now failed to grow since May and WA since April. QLD hasn’t grown at all in the cycle.

It’s been a decent rebound over twelve months but its running out of juice too soon and well short of what’s needed for growth.