New home sales down for second consecutive month
New home sales are expected to continue their decline for the next 12 months.
The Housing Industry Association (HIA) New Home Sales report shows a 0.7% decline for national new home sales in February. The result represents the second consecutive month of decline for new home sales.
"The decline in new house sales for the first two months of 2018 is consistent with our expectation that residential building activity will move lower over the next 12 months," HIA senior economist Shane Garrett said.
Garrett argued that restrictions around investment lending and participation by foreign investors were contributing to weaker conditions in residential building.
The trend varied across the country's five largest states surveyed in the report. While Queensland saw a 16.3% decline in new home sales, New South Wales saw an 11.7% increase.
"New house sales in NSW saw decent growth during February. There were several favourable changes made by the NSW government relating to first home buyers last year, and these have been beneficial to the state's housing industry," Garrett said.
Garrett predicted that new home sales would trend downward for the remainder of the year in line with declining new home building activity.
"We expect things to bottom out in late 2019 before modest growth resumes," Garrett said.