HIA new homes sales for January are out and are clearly past the peak:
Total seasonally adjusted new home sales declined by 1.9 per cent in December 2014, following a string of increases that began in August last year. This second round of momentum saw sales during the December quarter reach a level that was 4.9 per cent higher than in the previous quarter and 8.3 per cent higher than in the final quarter of 2013.
The final quarter of new home sales (as well as ABS building approvals) in 2014 provides positive signs for the level of actual new home building activity in early 2015. A key change in conditions for the residential construction sector in 2015 is the February cut to the official cash rate, taking it to a new historic low of 2.25 per cent. It should be noted, however, that this cut was made in the context of the Australian Prudential Regulatory Authority’s heightened monitoring of lending standards in parts of the housing market.
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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.
