November: fall in new home sales

The latest HIA-JELD-WEN New Home Sales Report shows detached house sales fell by 1.1 per cent, but sales of multi-unit housing increased by 8.1 per cent in November, 2010.

Over the three months to November 2010, new home sales fell by 2 per cent to be 11 per cent lower, compared to the corresponding three month period in 2009.

The Reserve Bank of Australia raised its benchmark cash interest rate to 4.75 per cent at its November board meeting.

In the same month, detached new house sales increased by 6.2 per cent in New South Wales and by 1.5 per cent in Western Australia.

Sales fell by 0.2 per cent in Victoria, 10.4 per cent in Queensland and 0.8 per cent in South Australia.

HIA chief economist Harley Dale said new home building conditions weakened considerably over the second half of 2010 and the November rate rise added ‘‘further salt to the wound’’.

‘‘New home building activity looks set to decline across all states and territories in 2011,’’ Dr Dale said.

‘‘The risk of a sharp contraction in new home building in 2011 is exacerbated by the negative impact on households and small businesses of increases in borrowing costs and by the persistent lack of available credit for small and medium-sized new home projects.’’

AAP