Drop in new home sales

A survey has shown that the number of new home sales has dropped for the first time in four months in May as fewer home buyers have entered the market.

New figures released earlier this week by the Housing Industry Association (HIA) have shown that new home sales fell 5.7 per cent in May. New home sales had risen for the first four months of 2009.

HIA stated that the reduction of sales in May was due to first home buyer's concern over weakness in the trade-up and investor markets. In May the number of unit sales rose by 6.1 per cent and a fall of 6.8 per cent in detached home sales.

Ben Phillips HIA's senior economist stated that the May figures showed that it would require more than just first home buyers to generate a recovery in home building. Mr. Phillips further stated that most of the new homes are attributable to the first home buyers.

New home sales State by State

Western Australia suffered the largest decrease in new home sales with a 13.5 per cent decline in May.

New home sales were down by 9.9 per cent in NSW and 8.7 per cent in Victoria.

On a more positive note new home sales rose by 2 per cent in Queensland - the states fourth rise in the last five months - and South Australia was up by 3.6 per cent.

This information was obtained by the HIA who surveyed 100 of Australia's largest builders and developers.