In positive sign for the WA new home market, sales increased in the three months to July, according to the HIA.
Chief economist Tim Reardon said new home sales in the state rose 9.5 per cent over the reporting period.
This follows UDIA WA figures showing new land sales increased 16.5 per cent in the June quarter.
Chief executive Tanya Steinbeck said the northwest corridor, which was the biggest growth corridor, had a lift of 35 per cent in sales volumes over the quarter and sales were also up 10 per cent in the northeast corridor.
“While the year-on-year figures are still recording declines, these quarterly results are particularly positive given the period from April to June was relatively uncertain due to the Federal Election in May and the continuation of tight lending restrictions impacting on people’s access to finance,” she said.
“We hope that the next quarter will see further stabilisation in the market as the Keystart changes come into effect (they did not come into effect until July 1), interest rates remain low and finance restrictions start to loosen.”
Mr Reardon said nationally, new sales increased 6.1 per cent over the three months to July, although they were still down 12.8 per cent on the same time last year.
“The increase in the most recent three months reflects the distortion in home sales created by the Federal Election in May,” he said.
“The small improvement in sales in the three months to July suggests that the decline in new home sales that has been under way for more than a year has started to slow; however, this is not an indication that the market is at the bottom of this cycle.
“New home sales fell in July by 7.2 per cent compared to the previous month and well down from levels experienced earlier this year.”
Mr Reardon said the two recent interest rates cuts, tax cut and the repeal of regulatory restrictions on lending had not yet led to increased activity in the home building market.
Originally published in the Stirling Times – 12th September 2019