Sales of newly constructed Australian homes have fallen to a record-hitting 15-year low in August, an industry survey report by the Canberra-based Housing Industry Association (HIA) revealed on Wednesday.
Sales of new homes from July to August showed a drop of 5.3 per cent, or from 5,682 units to 5,383 units. It was the sector's lowest number of sales since 1997.
"New home sales for August are the latest in a string of soft new housing updates for this financial year," Dr Harley Dale, HIA chief economist, said in a statement. "A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome."
The latest numbers came a day after the RP Data Rismark Home Values Index by property research firm RP Data showed that Australian home prices rose for the fourth consecutive month in September, painting a confusing picture for the country's housing sector.
"New home sales for August are the latest in a string of soft new housing updates for this financial year, and that follows a very weak year for new home building in 2011-12," Dr Dale said.
"Indeed, following two consecutive years of decline in new housing starts over 2010-11 and 2011-12, and leading indicators pointing to weakness extending into 2012-13, policy settings in August 2012 were clearly inappropriate."
Sales of detached houses in August dropped in all states, with the largest registered in New South Wales at 7 per cent, Victoria at 8.6 per cent and Western Australia at 9.4 per cent.
Queensland dropped 2.9 per cent while South Australia by 2.6 per cent.
Sales of detached housing and multi-units dropped 5.8 per cent and 2.5 per cent, respectively, during the period.
"A fresh round of interest rate cuts will help rebalance this situation, although financial institutions obviously need to play their role in cementing this outcome," Dr Dale said.
He noted however that it is not the clear-cut solution to the current dilemma.
"Governments have an important role to play in driving reform measures to lower the excessive tax base faced by the sector," he said.
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