Online news search reveals that new home sales in Australia fell 8.6 percent month-on-month to 7,712 in August, the lowest level since January, as higher interest rates started to bite, according to the Home Industry Association (HIA). In July, sales had increased 1.5 percent.Sales of detached homes fell 8.9 percent last month to their lowest level since December, while apartment sales were down 6.8 percent.
HIA chief economist Harley Dale called for the government to restore housing affordability and increase the supply of new affordable housing.
‘HIA has long promoted policies to encourage and reward higher savings on the part of budding first home buyers, to increase investment by all levels of government in residential infrastructure and to provide practical incentives to increase the supply of affordable rental housing,’ Dale said in a statement.
Last month the Reserve Bank of Australia raised its official discount rate by 25 basis points to 6.50 percent — the highest level since November 1996 and the first increase since November last year — to contain inflationary pressures.
CommSec equities economist Martin Arnold said the weakness in the residential construction industry will affect other areas.
‘The ongoing weakness in residential construction can cause ripple effects into other areas, with a range of businesses such as homewares and furniture also likely to experience a slowdown in spending,’ Arnold said in a statement.
