New home sales at 2-year low, HIA says

The sale of new homes in Australia fell a seasonally adjusted 7.2 per cent in July, according to a survey by the Housing Industry Association (HIA).

Increasing living costs and high mortgage rates are discouraging potential buyers from leaping on to the property ladder with the purchase of a new development, the Age reported.

The publication also claimed that the fall easily overturned the gains seen in June, when new home sales were up four per cent.

HIA data illustrated that Western Australia was the hardest hit by the downturn with new home sales falling by 24.5 per cent.

Sales were down by 11.7 per cent in New South Wales and 11.2 per cent in South Australia, the HIA said.

Victoria saw a 7.2 per cent fall during the month of July while Queensland emerged unscathed as sales actually increased by 13.4 per cent, which represented the first rise in six months.

HIA's chief economist Harley Dale said the update was "very weak" and suggested the looming move to lower interest rates was a "welcome first step to a much needed home building recovery".

"In the interim, embedded statutory taxes and charges continue to heavily discriminate against new residential development, a decidedly unhelpful state of affairs at a high risk time for employment in the home building industry", he added.

Meanwhile, the Reserve Bank of Australia also announced that total credit provided by lenders climbed 11.2 per cent in July, which Bloomberg claimed was the smallest rise in almost six years.

Compare loan deals.

Latest Money News from Money-Au.com.au