HIA apartment sales CRASH

From the HIA press release for new home sales:

New house sales dip in opening month of 2018

Following a relatively strong finish to 2017, detached house sales pulled back in January this year, declining by 2.1 per cent in the month. This result was due to a decline in sales in both New South Wales and Victoria, while the remaining mainland states each enjoyed increases in January.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – provides an early indication of trends in the residential building industry.

“The most encouraging news this month, is that new home sales in Western Australia picked-up by 1.2 per cent. After declining by more than 23 per cent in 2017, this growth in sales is the first sign that conditions in that market are improving,” said Geordan Murray, HIA Senior Economist.

“In the major east coast markets house building played second fiddle to the boom in apartment construction throughout the current new home building cycle. It didn’t experience the same rise during the 2012-2016 period and by the same token detached house building is unlikely to experience the same magnitude of decline as the current downturn unfolds.

“HIA New Home sales data has been telegraphing a modest decline for some time. We expect detached house building in 2018 to decline by 5.1 per cent, while multi-unit construction is forecast to decline by 15.0 per cent.

“Part of the reason for this dynamic in new home building is the changing composition of investors and owner occupier buyers. The tighter credit environment has cooled demand for new housing among investors and this has been more evident in the market for new apartments. In some instances owner- occupiers have seen improvements in credit conditions and first home buyers have benefited from changes to incentive schemes at the behest of various state governments. This is supporting demand for new low-density housing, including detached houses and should ensure the forthcoming down cycle is a relatively modest one.”

Looking at the state by state results for new house sales in January: there were declines in New South Wales (-5.7 per cent) and in Victoria (-4.4 per cent); while sales increased in South Australia (4.6 per cent), Western Australia (1.2 per cent), and Queensland (1.0 per cent).

Looks pretty good, eh? Gentlemanly decline but nothing to worry about.

Until you realise that the HIA usually publishes a Private New Home Sales chart which includes apartments. It has strangely gone missing and in its place we only have houses.

One can’t say for sure why but access to the deeper report which breaks out apartment sales offers a pretty good lead though even it hasn’t been updated:

The HIA is currently forecasting -15% for construction while sales are forecasting -60% more or less.

Here is the full report just for laughs.