Australian Property News

New home sales drop off in May

Posted on Tuesday, June 30 2009 at 4:05 PM

New home sales fell 5.7 per cent in May, showing first homebuyers can't sustain a recovery in home building on their own, according to the Housing Industry Association (HIA).

The May result remains 15 per cent above the low point for new home sales in December last year, HIA senior economist Ben Phillips says.

"The combination of low interest rates and the $21,000 First Home (Owner) Boost have lifted prospects for the housing industry, which is expected to convert to a recovery in home building activity from the June quarter of 2009," Phillips says.

"The vast majority of the housing recovery has been at the first homebuyer end of the market. As that segment inevitably slows over the remainder of 2009 it's vitally important that the much larger trade-up and investor segments return to health."

Sales of apartments and units grew 6.1 per cent in May, on the back of a very weak start to 2009.

Detached new home sales grew two per cent in Queensland and 3.6 per cent in South Australia in May, while they fell 9.9 per cent in New South Wales, 8.7 per cent in Victoria and 13.5 per cent in Western Australia.