Sales of new homes by Western Australia's largest builders dropped 33.2 per cent in February 2008, following a 47.1 per cent jump in January, figures released today by the Housing Industry Association (HIA) show.
Sales of new homes by Western Australia's largest builders dropped 33.2 per cent in February 2008, following a 47.1 per cent jump in January, figures released today by the Housing Industry Association (HIA) show.
HIA Executive Director, Western Australia, Mr John Dastlik, said that the pull-back in February unwound a very strong start to the year for sales in WA.
"We suspected that the big January boost was unsustainable and it was, with the overall level of sales remaining flat to slightly healthier," Mr Dastlik said.
"Over the three months to February this year the level of sales increased by 4 per cent which is a better result. Compared to the three months to February 2007 sales were down by only 2 per cent," Mr Dastlik said.
"This is an important update as the aggressive increase in interest rates we have experienced in recent months will make for a challening environment for new home building in 2008. With leading housing indicators in free-fall, the last thing the industry and consumers need is further interest rate rises."
HIA's New Home Sales Survey is compiled from a sample of the largest 100 residential builders in Australia.
Meanwhile, the HIA's national data showed that home sales took a slide even before the Reserve Bank of Australia raised interest rates for the second consecutive month on March 4.
And higher interest rates are expected to curtail building and real estate activity for the rest of this financial year.
New house and unit sales across Australia fell by 5.3 per cent in February to 8,667, the HIA said.
Detached house sales were down five per cent in the month to 7,776. This follows a 13 per cent rise in January.
The more volatile apartment sales dived by 7.5 per cent to 891 units during February, which followed January's 2.9 per cent decline.
The data is based on a survey of Australia's 100 largest residential building firms and were collected after the February rate rise but before the March monetary policy tightening, which took the cash rate to a near 12-year high of 7.25 per cent.
New home sales posted dramatic falls in the commodities-rich states of Queensland and Western Australia, where sales were down by one third, following healthy gains during January.
New South Wales and Victoria, where sales climbed by 17.9 per cent, were the only states to post growth.
HIA chief economist Harley Dale said higher variable lending rates were likely to hamper Australian home sales in 2008.
"For Australia as a whole there is no sign of any upward movement in new home sales or building approvals, while housing finance for new home building has been trending down for some time," he said.
"This is little wonder given that over the space of only seven months through to March this year we saw a 1.25 percentage point hit to an average variable mortgage rate.
"Leading indicators of new home building are likely to be flat at best through the remainder of 2007/08."
The major banks raised their lending rates in January even though the RBA did not tighten monetary policy that month.
The banks raised their variable home loan rates by more than official RBA rates rises in February and March, with ANZ, St George and Westpac now charging mortgage rates of 9.37 per cent.
Interest rates also rose in August and November last year.
