“New home sales hit a two year low in October last year, but recovered well in November and December,” said HIA Chief Economist, Dr Harley Dale. “The late 2016 results were strong for the sales of ‘multi-units’, while detached house sales remained in reasonable shape.”
The December update for the HIA’s monthly New Home Sales survey shows growth of 0.2 per cent in total seasonally adjusted new home sales in December 2016. This result follows faster growth of 6.1 per cent in November. Multi-unit sales increased by 6.4 per cent in December 2016. Detached house sales fell by 1.6 per cent, within which there was strong gains for New South Wales and Victoria.
“The strong finish to 2016 for new home sales admittedly follows a very weak month in October,” said Harley Dale. “Obviously it is better that new home sales bounced back rather than kept falling!” “The overall profile for both HIA New Home Sales and ABS Building Approvals is consistent with the first stage of the down cycle in new home commencements being a mild one. We expect this down cycle to begin in 2017.”
“As has been the case all cycle, new home sales (and building approvals) highlights the large differences in new home building conditions between the five mainland states,” concluded Harley Dale.
New detached house sales fell by 2.3 per cent in the December 2016 quarter, while the sale of multiunits grew by 3.2 per cent.
Seasonally adjusted new detached house sales increased in two out of five mainland states in December 2016, compared to four out of five states in November. Detached house sales increased in the month of December by 2.4 per cent in New South Wales and by 5.8 per cent in Victoria. The monthly fall in detached house sales was 9.1 per cent in Queensland, 1.9 per cent in South Australia, and 9.0 per cent in Western Australia.
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.
