Category: Building & Construction

New Home Sales Decline Further from Peak In September

The HIA says the decline in new home sales which commenced in 2015 has continued with a 6.1 per cent reduction during September 2017.

The results are contained in the latest edition of the HIA New Home Sales Report the market’s leading gauge of sales activity in residential building across the five largest states. During September 2017, new detached house sales fell by 4.5 with a reduction of 16.7 per cent on the multi-unit side of the market.

During September 2017, NSW was the only state to see growth in new detached house sales (+3.7 per cent) compared with August. WA experienced the largest reduction in sales during September (-15.1 per
cent) followed by Queensland (-8.7 per cent). New detached house sales also fell in Victoria (-2.3 per cent) and SA (-1.7 per cent) during September.

“The decline in home sales over the past 18 months reflects the slowing in output across the economy and is a guide to short term activity in the residential building industry,” HIA Senior Economist, Shane Garret said.

“New home sales is a leading indicator of approvals data and shows that building activity peaked in March 2016 following the longest ever upturn in new home building.

“This process of adjustment will involve quite sizeable reductions both in building activity on the ground.

We expect that activity will bottom out sometime in 2019 with a recovery then setting in – assuming the economy reverts to its long-term average growth rate of around 3 per cent,” concluded Shane Garrett.

Becoming more urban

From The Conversation.

Australia is increasingly linked to a fast-growing global population. The populations of Sydney and Melbourne are both expected to exceed 8.5 million by 2061. What will Australia’s cities look like then? Will they still be among the world’s lowest-density cities?

Such sprawling cities result in economic (productivity), social (spatial disadvantage) and environmental weaknesses (including a very big ecological footprint). Can our cities transform themselves to become more competitive, sustainable, liveable, resilient and inclusive?

Australian governments at all levels aspire to these goals, but they require multiple transitions. The prospects of success depend on the transformative capacity of four groups of stakeholders: state government, local government, the property development industry, and community residents.

Our newly published research has found such capacity is lacking, so transformation on the scale required remains a major challenge. Our research included a survey in Sydney and Melbourne of suburban residents’ attitudes to medium-density living and neighbourhood change – essentially “sounding out” community capacity for change. This article explores some of the findings.

So why do community attitudes in the suburbs matter? The key change involves the form and fabric of Australian cities: from a low-density suburban city to a more compact form characteristic of Europe. This requires regenerative redevelopment: redirecting population and property investment inwards to brownfields and greyfields redevelopment, rather than outwards to greenfields development, and increasing the supply of medium-density housing – the “missing middle”.

Unlike greenfields and brownfields, however, greyfields are occupied. More intensive urban infill represents a challenge to residents of established suburbs to share their higher-amenity, low-density space. And elected local councillors tend to align with their residents’ resistance to “overdevelopment” and changes in “neighbourhood character”.

Are attitudes changing?

In September 2016, the Centre for Urban Transitions surveyed 2,000 Sydney and Melbourne households in established middle-ring suburbs.

Asked “What type of dwelling would you want to live in?”, nearly 60% of residents in both cities favoured a detached house and yard. This is down from 90% in the early 1990s. So, in the space of one generation, attitudes have shifted significantly toward embracing higher-density living.

However, living arrangements extend beyond the dwelling. They include the neighbourhood and wider suburban context. Our survey explored three distinctive living environments:

  1. a separate dwelling with a garden in a suburb with poor public transport
  2. a medium-density dwelling with no garden but close to public transport
  3. a high-rise apartment in the CBD or surrounding areas.

Responses revealed that when location was combined with housing type, this significantly increased preference for medium-density housing when located in established suburbs with good public transport and access to jobs and services. In both Sydney and Melbourne, 46% favoured this. That was the same proportion as preferred a separate dwelling and garden in a car-dependent suburb. Just 8% opted for apartments.

The question is whether these shifts in preference are reflected in residents’ attitudes to higher-density housing in their own neighbourhoods.

The survey found 71% of respondents were “aware of neighbourhood change in their locality”. This figure was identical for renters and property owners.

Fewer than 10% of residents in both cities think such change is a good thing, but almost 40% understand it has to happen. Just over 10% are neutral. Preference for less or no change sits around 45%.

This suggests capacity to accept change is growing, but it is grudging and not strongly endorsed.

The survey’s final stage probed the extent to which property owners contemplating a move were aware of, or open to, options of selling as a consortium of neighbours. While not common, examples are being reported with value uplifts resulting from lot consolidation ranging from 10% to 100%.

One-quarter of Sydney respondents were open to consolidating property for sale with neighbours. This number was even higher (39%) for investment properties.

What needs to be done?

Consolidated lot sales are not part of the business model of most real estate agencies, local government, or property developers.

It’s an area where the property development industry lacks capacity and is still failing to respond to the medium-density urban infill challenge. And state governments are reluctant to extend mid-rise medium-density zones in the big cities beyond designated activity centres and transport corridors.

Supply of well-designed medium-density housing needs to be greatly increased in the well-located, established, low-density, middle-ring suburbs. And it needs to happen at a precinct scale of redevelopment beyond that of knock-down-rebuild. This would enable more innovative, sustainable and aesthetically attractive development.

Infill targets for new housing in Australia’s largest cities range from 65% (Brisbane) to 85% (Adelaide), with Melbourne and Sydney in between. But these targets are not being achieved (not even Perth’s 47%). Greenfield development is still the main demographic absorber.

The Victorian government’s latest metro strategy introduced a new policy direction to “provide support and guidance for greyfield areas to deliver more housing choice and diversity”. That doesn’t alter many residents of these areas remaining resistant to change.

State and local governments need to introduce new statutory planning instruments and guidelines to enable greyfield precinct redevelopment. These are the focus of research in three Commonwealth Co-operative Research Centres (see here, here and here).

In an urban planning system that remains strongly top-down, local government serves as the main interface with local communities and property developers due to its role in planning approvals. Often this is reflected in local government’s gaming of the state government’s residential zoning schemes to ensure housing is “locked up” in minimal change zones. This effectively indicates that more intensive infill housing should happen “somewhere else” (the NIMBY syndrome).

David Chandler, a leading figure in Australia’s building and construction industry, sums up the challenges:

The capabilities needed to design and build small-scaled medium-density housing projects of three to ten dwellings up to three storeys atop below-grade parking have yet to be developed. If medium-density dwellings of the type described here are to make up a third of the housing landscape, a new marketing platform and delivery model will be required.

If governments are seriously minded to harvest the potential of greyfield sites and the urban middle, they will not only need to bring the community along in support of these more modest densification initiatives, they will need to be proactive in making sure the housing industry has the capabilities to deliver them.

Author: Peter Newton, Research Professor in Sustainable Urbanism, Swinburne University of Technology

New Sydney Land Costs Top $1,000 per SQM

According to the HIA-CoreLogic Residential Land Report, over the year to June 2017, residential land costs in key markets have soared to a new high with vacant land in Sydney now over $1,000 per square metre.

Price pressures in the market for residential land were most intense in Melbourne where the median price increased by 19.6 per cent over the previous 12 months. The pace of land price growth was also strong in Sydney (+9.8 per cent) and Adelaide (+8.0 per cent) over the same period. Land price gains were more modest in Perth (+5.0 per cent) and Brisbane (+0.1 per cent) over the same period. Hobart was the only capital city to experience a reduction in the median land price over the year to June 2017 (-15.8 per cent).

The report indicates that the median lot price nationally increased to $256,683, an increase of 8.5 per cent on a year earlier and across Australia, land turnover is down about 9 per cent on a year ago.

“Land supply policy has to be central to making real and sustainable progress on housing affordability. This requires improved outcomes with respect to financing of housing infrastructure, monitoring and timely reporting on land release and speeding up zoning and subdivision process,” said HIA’s Shane Garrett.

According to Eliza Owen, CoreLogic’s Commercial Research Analyst, “Record high lot prices over the past five quarters are likely to have contributed to worsening affordability and influenced the unprecedented level of high density residential development that is currently under construction.

“As the Australian economy shifts from residential to non-residential construction, demand for vacant residential land may shift in location and scope. New and prospective infrastructure developments such as the inland freight rail and Badgerys Creek Airport will open up new employment and development opportunities further from the metropolitan regions which may stimulate demand for housing in areas with a more affordable price tag,” concluded Eliza Owen.

NAB expects prices to slow in 2018-19, but not a severe adjustment.

The latest NAB Residential Property Index is out, and it rose 6 points to +20 in Q3, with sentiment (based on current prices and rents) improving in all states except NSW (which edged down). Sentiment rose sharply in Victoria (up 27 to +63) and in Queensland (up 4 to +16). Whilst sentiment rises and confidence lifts among property experts in Q3, NAB expects prices to slow in 2018-19, but not a severe adjustment.

Australian housing market sentiment lifted over the third quarter of 2017, supported mainly by a large increase in the number of property experts reporting positive rental growth in the quarter and continued house price growth in most states.

“The NAB Residential Property Survey shows an improvement in market sentiment across most states last quarter, but we continue to see market conditions that vary across different locations. The momentum is clearly with Victoria, while NSW is experiencing something of a slowdown,” NAB Chief Economist Alan Oster said.

Confidence (based on forward expectations for prices and rents) lifted in all states, led by Victoria, and with WA the big improver. Despite weakening price growth in NSW, higher confidence is being supported by predictions for higher rents.

First home buyers continue emerging as key buyers in both new and established housing markets, accounting for over 36% of all sales in new housing markets and around 29% in established markets.

During Q3, the overall market share of foreign buyers in new property markets fell to a 5-year low of 9.5%, potentially due to lending restrictions on foreign buyers. Low foreign buying activity in new property markets was led by Victoria, where the share of sales to foreign buyers fell to 14.4% (20.8% in Q2).

For the first time, tight credit was identified as the biggest constraint on new developments in all states, while access to credit was the biggest barrier for buyers of established property. Price levels were the biggest concern in both Victoria and NSW. In WA and SA/NT, property experts said that employment security was the biggest barrier to buying an established home.

They also highlighted lower foreign buying activity in new property markets, with VIC saw the share fall to 14.4% (from 20.8% in Q2) and NSW down to 7.8% from 12% in Q2. In contrast, QLD saw a rise to 11.4%, up from 8.6% last quarter.

NAB’s forecasts on residential prices

NAB Group Economics has revised its national house price forecasts, predicting an increase of 3.4% in 2018 (previously 4.3%) and easing to 2.5% in 2019. Unit prices are forecast to rise 0.5% in 2018 (-0.3% previously), with a modest fall expected in 2019.

“More moderate market conditions reflect a combination of factors which vary across markets, including deteriorating affordability, rising supply of apartments, tighter credit conditions and rising interest rates in the second half of 2018” said Mr Oster.

“But still relatively low mortgage rates, a favourable housing supply-demand balance and strong population growth population growth should continue to provide support for prices going forward.”

“By capital city, house price growth is forecast to be moderate outside of Perth – where prices are flattening out – consistent with good business conditions and better employment growth.”

“Melbourne and Hobart are currently experiencing solid growth in prices; Sydney is cooling and we expect Brisbane and Adelaide will cool. Finally, we expect 2018 to mark the beginning of a gradual turnaround for Perth.”
About 300 property professionals participated in the Q3 2017 survey.

Residential Construction Rotates

The latest data from the ABS shows building construction activity to June 2017. We see a small rotation towards non-residential work, supported by investment from the public sector. The trend estimates, which irons out the bumps in the series, shows a rise in total building work done, with a fall in residential building of 1.2% and a rise in non-residential building of 2.8%.

Within the residential data, new houses fell 1.3% and other new residential building fell 1.0%.

The trend estimate of the value of total building work done rose 0.3% in the June 2017 quarter.

The trend estimate of the value of new residential building work done fell 1.2% in the June quarter. The value of work done on new houses fell 1.3% while new other residential building fell 1.0%.

The trend estimate of the value of non-residential building work done rose 2.8% in the June quarter.

The trend estimate for the total number of dwelling units commenced fell 3.0% in the June 2017 quarter following a fall of 2.8% in the March quarter.

The trend estimate for new private sector house commencements fell 1.6% in the June quarter following a fall of 2.7% in the March quarter.

The trend estimate for new private sector other residential building commencements fell 4.6% in the June quarter following a fall of 3.0% in the March quarter.

Trend dwelling approvals rise 1.1 per cent in August

The number of dwellings approved rose 1.1 per cent in August 2017, in trend terms, and has risen for seven months, according to data released by the Australian Bureau of Statistics (ABS) today.

In trend terms, approvals for private sector houses rose 0.9 per cent in August. Private sector house approvals rose in Queensland (2.0 per cent), South Australia (1.4 per cent), Victoria (1.1 per cent) and Western Australia (0.3 per cent), but fell in New South Wales (0.3 per cent).

 

Dwelling approvals increased in August in the Australian Capital Territory (8.9 per cent), Northern Territory (8.3 per cent), Victoria (1.5 per cent), Tasmania (1.2 per cent), Queensland (1.0 per cent), South Australia (0.9 per cent) and New South Wales (0.7 per cent), but decreased in Western Australia (0.8 per cent) in trend terms.

“Dwelling approvals have shown signs of strength in recent months, although are still below the record high in 2016,” said Bill Becker, Assistant Director of Construction Statistics at the ABS. “The August 2017 data showed that the number of dwellings approved is now 6.5 per cent lower than in the same month last year, in trend terms.”

In seasonally adjusted terms, dwelling approvals increased by 0.4 per cent in August, driven by a rise in private dwellings excluding houses (4.8 per cent), while private house approvals fell 0.6 per cent.

The value of total building approved fell 0.3 per cent in August, in trend terms, after rising for six months. The value of residential building rose 0.7 per cent while non-residential building fell 1.8 per cent.

New home sales lift in August – HIA

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – says for the three months to August compared with the same period last year, house sales in Victoria are 15.7 per cent higher and up by 9.2 per cent in South Australia. Over the same period, sales declined in Queensland (-7.3 per cent), WA (-15.4 per cent), NSW (-17.4 per cent) and Queensland (-37.9 per cent).

“New home sales increased by 9.1 per cent last month as a result of very strong results in Victoria and Western Australia, but over the year sales have continued to slow,” stated HIA’s Principal Economist, Tim Reardon.

“The jump in sales in July confirms our forecast of a slowdown in building activity through until 2018/19.

The increase in sales in August offsets larger declines in sales in recent months, but it is not sufficient to reverse the decline in sales that is evident since early 2016,” continued Mr Reardon.

“Results in July and August have been affected by government interventions in NSW and Victoria which have seen first home-buyers returning to the new home market.

“Victoria has seen record numbers of new building approvals and new home sales are continuing to drive even higher. Strong population growth and employment growth, fortified with enhanced first home buyer incentives, is prolonging the boom in building activity.”

“The trend in new home sales continues to provide a strong leading indicator of the trend in residential building approval figures from the ABS as can be seen in the chart below,” concluded Mr Reardon.

The Light In the Tunnel – The Property Imperative 09 Sep 2017

A bunch of new data came out this week, so we discuss the findings and explore what it means for households and their budgets.

Welcome to the Property Imperative weekly to 9th September 2017, the latest edition of our finance and property news digest.

We released the August edition of our Mortgage Stress research which showed that across the nation, more than 860,000 households are estimated to be now in mortgage stress (last month 820,000) with more than 20,000 of these in severe stress. This equates to 26.4% of households, up from 25.8% last month.

The main drivers of stress are rising mortgage rates and living costs whilst real incomes continue to fall and underemployment is on the rise.  This is a deadly combination and is touching households across the country, not just in the mortgage belts. In August higher power prices, council rates and childcare costs hit home. You can watch our video where we walk through the post codes most at risk.

The latest Adelaide Bank/REIA Housing Affordability Report showed that buying a house became even less affordable during the June quarter with the proportion of median family income required to meet average home loan repayments increasing by 0.2 percentage points to 31.4 per cent.

Research from Mozo.com.au showed that one third of first time buyers were reliant on help from the Bank of Mum and Dad, and the average value of that assistance in NSW was $88,250. This is pretty similar to our own findings on the rise and rise of the Bank of Mum and Dad.

Data from Roy Morgan highlighted the fact that more Australians are now under-employed than at this time last year. 1.24 million (9.5%) Australians are under-employed (which means looking for work or looking for more work), up a significant 324,000 (2.4%) in a year. They also called the “real” unemployment rate at 10.2%, as opposed to the official ABS data of 5.6%.

CoreLogic said that while auction clearance rates were pretty firm, the volume of sales continued to fall.  But there is no stopping the housing train. Demand for property is still strong, but the mix of purchasers is changing as shown by the housing finance from the ABS which came out on Friday.

Owner occupied purchases are steaming ahead, while investment lending is stagnating. A clear reflection of the tightening in investor lending regulation, and the availability of new incentives and grants for first time buyers, alongside the attractor loan rates for new borrowers. We saw first time buyers more active in NSW and VIC, two states where new concessions started in July. The proportion of first home buyer commitments rose to 16.6% in July from 14.9% in June.  Just remember back in 2009 they comprised more than 30% of total transactions, so all the hype about the return of first time buyers is over done in our view.

But in July, trend lending flows were $33 billion, up 0.1% overall, with owner occupied lending up $20.8 billion or 0.7%, and Investment lending down 1% to $12.1 billion.  The number of owner occupied transactions rose 0.6%, construction of dwellings rose 2%, new dwellings 2% and the purchase of established dwellings 0.3%. As a result, total bank home lending stock rose again to $1.61 trillion, another record.

There are some amazing attractor mortgage loan offers in the market right now, as lenders fight for market share. We see significant falls in some investment property loan offer rates, as well as discounts for new owner occupied borrowers, with rates down to as low as 3.65%. These rates of course are not available for existing borrowers, the oldest trick in the book, so this may explain a rise in refinanced transactions.

ASIC launched a series of videos to help consumers make “MoneySmart” decisions when buying a home. Some would say, better late than never! The recommendations on budgeting are especially pertinent.  However, a weakness of the MoneySmart calculators are they are static, we think they need a calculator to show the impact of changing interest rates for example. That said, their TrackMySpend App is a really useful tool to get to grips with what is being spent.

The point is that our research shows households are exposed to potential future interest rate rises, and whilst lenders are required to factor in expense and interest rate buffers, they are probably not sufficient to protect borrowers in a rising rate environment, and in any case, the majority of borrowers do not understand the financial impact of such rises, nor are they planning for them. We think lenders should have an obligation to display the recalculated monthly repayment at an average long term rate, which would be at least 3% above current levels. Households would be shocked to see the impact, and it may reduce the overreach which many are locked into at the moment.  It all depends on when rates rise.

Treasurer Scott Morrison said that interest rates are “obviously” going to rise in the future but that many home owners would be able to avoid mortgage stress thanks to “mortgage buffers”.

It’s worth noting that ASIC is alleging Westpac used an expenditure benchmark that was based on “conservative” estimates of what a household would spend and “represents only an estimate of what Australian families consume”.

APRA said this week it is important that lenders accurately assess borrower income and living expenses. Living expenses, in particular, are difficult to measure, and so banks often utilise benchmarks as a proxy where borrower estimates appear too low. In fact, APRA’s recent work showed the lion’s share of loans by the larger lenders are assessed using expense benchmarks, rather than the borrower’s own estimates. There is nothing wrong in principle with using benchmarks, provided they aren’t seen as a substitute for proper inquiries of the borrower about their expenses.

Actually, in some cases, across the market, loans were being made where the borrower had only the slimmest of spare income.

The RBA Governor also warned that rates will rise at some point and discussed why lenders may trade off risks in their book against market share.  To stress the point about rate rises, Canada lifted their cash rate this week, and already there are signs of home price corrections following there. The RBA held the cash rate again this week, and they highlighted the fact that the growth in housing debt has been outpacing the slow growth in household incomes, as well as poor wage growth. They still hold their view on positive future growth.

Some of the economic news this week was quite positive, with ANZ job ads higher rising 2.0% m/m in August, the sixth straight rise. Job advertisements currently sit 13.3% higher than a year ago.

The current account data from the ABS showed a deficient increase to $9.6 billion, partly due to lower export commodity prices.  Exports grew faster than imports though.

Overall the economy grew 0.8% in the June quarter. This was below expectations and was helped by significant government investment. Household consumption figure were pretty solid, but at the expense of the household savings ratio which dipped to 4.6%, (5.3% in March). As a result, the current savings ratio is the lowest since 2008, thanks to very weak wage growth. The point though is this cannot continue indefinitely, because household savings are not infinite, and they are also skewed in distribution terms towards those with more assets and net worth.  Stress resides among households with lower net worth and little or no savings.

Dwelling construction grew a moderate 0.2 per cent with growth being observed in New South Wales and Queensland. On an annual basis GDP growth is 1.9%, and to meet the RBA’s expectations will need to lift over the next year or so. We are not sure where such growth will come from.  We need new ways to lift productivity.

Finally, Retail turnover was flat in July, further evidence of the pressure on household budgets after stronger growth earlier in the year.

So to conclude, we still see home lending growing faster than inflation or wage growth, lifting household debt higher. This is at a time when interest rates are clearly going to rise higher, later.

Lenders are still trading off risk against market share, because at the end of the day, households will pick up the tab in a crash. But households should not simply rely on an assurance from the bank they can afford a loan, they should do their own work, to calculate the real effect on their budgets of a 3% rate rise.  In fact, borrowing less is the best insurance against future stress.

And that’s the Property Imperative weekly to 9th September 2017. If you found this useful do subscribe to get our updates, and check back next week.

 

Building Approvals Rose In July

The number of dwellings approved rose 0.7 per cent in July 2017, in trend terms, and has risen for three months, according to data released by the Australian Bureau of Statistics (ABS) today.

Dwelling approvals increased in July in the Australian Capital Territory (8.8 per cent), Victoria (1.0 per cent), Western Australia (0.8 per cent), South Australia (0.8 per cent), New South Wales (0.4 per cent) and Queensland (0.2 per cent), but decreased in the Northern Territory (9.7 per cent) and Tasmania (1.0 per cent) in trend terms.

In trend terms, approvals for private sector houses rose 1.0 per cent in July. Private sector house approvals rose in Queensland (1.5 per cent), Victoria (1.1 per cent), South Australia (0.9 per cent) and New South Wales (0.8 per cent), but fell in Western Australia (0.1 per cent).

In seasonally adjusted terms, dwelling approvals decreased by 1.7 per cent in July, driven by a fall in private dwellings excluding houses (6.7 per cent), while private house approvals were flat.

The value of total building approved rose 1.3 per cent in July, in trend terms, and has risen for six months. The value of non-residential building rose 3.1 per cent while residential building was flat.

“The value of non-residential building approvals have risen for the past six months, in trend terms, reaching a record high in July 2017,” said Daniel Rossi, Director of Construction Statistics at the ABS.

“The strength in non-residential building has been driven by approvals in New South Wales and Victoria, where a number of office and education buildings have been approved in recent months.”

Commenting on the figures, the HIA said:

“Today’s building approval figures show that the detached house building sector has plateaued at a high level while the building of multi-unit projects is sliding, was confirmed by ABS data today,” stated Tim Reardon, HIA’s Principal Economist.

The ABS released July Building Approval data today which shows that the paths of detached and multiunit residential building continue to diverge as the industry’s contribution to GDP is set to fall.

“Multi-unit sector approvals fell by 3.3 per cent to be 27.5 per cent lower than twelve months ago while detached house building approvals remained constant over the year.

“Detached home approvals were 2.4 per cent better in July this year than compared with July 2016.

“The slowdown in the multi-unit sector is also showing up in the amount of work done on all residential sites has fallen by 3.2 per cent in the first half of this year, based on the construction data also released by ABS today.

“This slowdown in on-site activity is likely to see residential building have a negative impact on GDP growth for the June quarter.

“There is also significant variation in residential building conditions around the country.

“Compared with a year ago multi-unit approvals in July were down by 20 per cent or more in all the eastern states while movements in detached home approvals included a 9.6 per cent increase in South Australia to a fall of 8.7 per cent in Western Australia.

“The significant variation in industry conditions between the multi-unit sector and detached homes and around the states is likely to continue for some time consistent with HIA’s latest forecasts”, Mr Reardon concluded.

New Home Sales Decline In July

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – show that sales volumes declined by 3.7 per cent during July 2017 compared with June 2017. Sales for the first seven months of this year are 4.6 per cent lower than in the same period of 2016.

Sales of new detached houses during July 2017 fell by 0.4 per cent nationally to their lowest level since October 2014. Victoria was the only state to experience growth (+9.8 per cent). Detached house sales fell in South Australia (-16.2 per cent), Queensland (-16.1 per cent), Western Australia (-9.1 per cent) and New South Wales (-5.2 per cent) during the month.

“A drop in new apartment sales have contributed to the continuing decline in new home sales nationally since they peaked in mid 2015,” stated HIA’s Principal Economist, Tim Reardon.

“July’s result was driven by a 15.7 per cent decline in multi-unit sales and a more measured reduction in detached house sales. The large drop in multi-unit sales this month is in contrast to strong sales volumes late in 2016 and early 2017,” outlined Mr Reardon.

“This trend is consistent with HIA’s expectation that activity will decline modestly from these record high levels over a number of years,” added Mr Reardon.

“Victoria was the notable exception – as the only state to grow sales during July 2017. Sales were up by 9.8 per cent on what is already a very high level of activity.

“On the other hand, the Western Australian Government’s First Home Buyers grant ended on 30 June 2017 and as a consequence sales in July fell sharply from what was already a very low base.