Australia’s new property sales have shown minimal growth this year, as property values overall are heading south.
New home sales went up marginally by just 0.2 per cent in April to a mere 11,000 homes.
That’s even lower than than the 4.3 per cent increase reported for March, and the lowest growth figures since sales shrank in the final two months of 2010.
The picture across the country overall is mixed, with detached new house sales dropping by a significant 10.3 per cent in Western Australia and a minor 0.5 per cent in South Australia. In New South Wales sales of new detached dwellings grew by 7.8 per cent while in Victoria they rose 2.2 per cent. In Queensland they slipped 1.5 per cent in the month.
Australia’s housing market has been subdued since the beginning of this year. Auction clearance rates – a barometer of overall demand, declined below the 60 per cent level , from highs of 80 per cent in the Melbourne and Sydney last year. Home prices have declined by as much as 20% in some areas.
Banks are making every attempt to revive the property market by reducing the coasts of some of their home loans as well as increasing the loan LVR.
Home building industry is highly regulated and heavily taxed. It is becoming increasingly more difficult to borrow funds for construction so that many developers are simply choosing to walk away from their projects.