New house sales fell to a 15-year low in August, underscoring the mixed picture for the housing market.
The Housing Industry Association new home sales report fell by 5.3 per cent in August, after a 5.6 per cent drop in July, led lower by a “persistently weak” detached house market.
HIA said new house sales fell 5.8 per cent in August, while apartments fell 2.5 per cent.
“New home sales for August are the latest in a string of soft new housing updates for this financial year, and that follows a very weak year for new home building in 2011-12,” said HIA chief economist Dr Harley Dale.
“Indeed, following two consecutive years of decline in new housing starts over 2010-11 and 2011-12, and leading indicators pointing to weakness extending into 2012-13, policy settings in August 2012 were clearly inappropriate.”
The Reserve Bank cut rates yesterday to 3.25 per cent from 3.5 per cent as signs emerged that the mining boom is stalling and that the domestic sector is struggling.
Home prices, however, have shown signs of responding to lower rates. Capital city home prices rose 1.4 per cent in September, following a flat reading in August, according to RP Data-Rismark, as the effects of lower interest rates filtered their way into the housing market.
By city, new house sales dropped 7 per cent in New South Wales and 8.6 per cent in Victoria. They dropped 2.9 per cent Queensland and 2.6 per cent South Australia. In Western Australia, they plunged 9.4 per cent in August.