Smashing Estate

It is shocking news for Australian real estate industry as an industry survey of 100 residential builders has found that new home sales dropped by around 1.1% in November 2008. This survey result is released today (7, January) by the Housing Industry Association (HIA). According to HIA it is a big turnaround from October 2008 when sales boost up by 3%. The November turn down compares to an increase in overall new house sales of 4.5% registered in last October.

Chris Lamont, the association’s chief executive, said it is a disappointing result but given hopes that the raised first home owners grant and lower interest rates would increase activity. He added multi-unit sales followed up an 8.6% drop in October 2008 with even more falls in last November. He said fears of recession and tighter credit overcame declining interest rates. On the other hand, the survey got sales of private detached houses dropped 0.4%, whereas sales of multi-unit housing dropped 5.3%. According to his opinion, “Particularly the news was bad for the multi-unit sector, which recorded a drop of just under 5.3 per cent.” “So that’s bad news for investment in the sector and it’s also bad news for those seeking rental accommodation in 2009 and into 2010.” Lamont said sales activity in the second half of the previous year reflected the general economic slowdown and finally, difficulties faced in finding financing for new home construction.