new home sales hit 18-year low: hia

so much for a housing led recovery once the mining boom fades

http://www.businessspectator.com.au/bs.nsf/Article/New-home-sales-hit-18-year-low-Sept-HIA-pd20121030-ZJVPG?OpenDocument&src=hp2

By a staff reporter, with AAP

New home sales fell to an 18-year low in September, highlighting a persistent lack of confidence in the sector, according to the Housing Industry Association (HIA).

The HIA new home sales report showed home sales in Australia declined 3.7 per cent in September, the third consecutive recorded monthly fall.

The fall was mostly due to a 3.5 per cent decline in the detached house market, while multi-unit sales dropped by 4.2 per cent.

HIA chief economist Harley Dale said that the figures reflect a dire lack of confidence toward housing in the Australian market.

“Interest rates have come down since November 2011 and there is a recognition that the home-buying environment has improved in 2012," he said.

"However, households remain reticent to actually make a decision to buy."

Mr Dale said the situation was especially evident in the new home building sector, where tax laws encourage buyers to look at existing property rather than new homes.

“Interest rate cuts should help foster a recovery in new home sales in the December 2012 quarter, along with new home incentives for first time buyers in three states and a nascent recovery gathering legs in Western Australia,” he said.

“The Reserve Bank of Australia needs to play its part by cutting rates again next Tuesday – a renewed easing of rates in October that is not followed up could add to household uncertainty and, perversely, further damage confidence.”

The RBA cut the official cash rate by a quarter of a per cent, to 3.25 per cent, in October.