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3 April 2013

New Home Sales Show Mixed Signals in February

New home sales stumbled in February, following four consecutive months of growth, said the Housing Industry Association, the voice of Australias home building industry. The HIA New Home Sales report, a survey of Australia's largest volume builders, showed that total seasonally adjusted new home sales fell by 5.3 per cent in February, reflecting a 4.0 per cent reduction in detached house sales and an 11.0 per cent drop in multi-unit sales. These data are disappointing in the context of the growth in sales over previous months , said HIA Senior Economist, Shane Garrett. The broadly based decline in activity during February is a reminder of how delicate the nascent recovery in the housing industry really is, added Shane Garrett. If we take a broader view of the situation, the overall direction of activity is still quite encouraging, commented Shane Garrett. New home sales are up strongly over the last three months in almost all states, in terms of both houses and multi-units, said Shane Garrett. Nonetheless, Februarys data emphasise how far housing market activity has fallen from the levels of just three years ago. The industry is struggling in the current economic environment and strong policy measures will be required to bring market activity back up to levels consistent with Aus tralias long term requirements, concluded Shane Garrett. In the month of February 2013 detached house sales fell by 13.7 per cent in Victoria, 2.8 per cent in New South Sales and 6.7 per cent in South Australia. Increases in detached house sales occurred in both Western Australia (+1.9 per cent) and Queensland (+0.8 per cent) during February.

PRIVATE NEW DWELLING SALES - AUSTRALIA (SEASONALLY ADJUSTED)

9,000 8,500 8,000 7,500 10,000 7,000 8,000 16,000 14,000 12,000

6,500 -5.3% 6,000

6,000 5,500 5,000 4,500

4,000
2,000 0

Feb-10

Feb-11

Feb-12

Aug-11

Aug-10

Aug-12

Dec-11

Dec-10

HIA New Home Sales (LHS)

ABS Seasonally Adjusted Approvals - Private Sector (RHS)

For further information please contact: Shane Garrett, Senior Economist

0416 633 261

Dec-12

Feb-13

Jun-10

Jun-11

Jun-12

Oct-10

Oct-11

Oct-12

Apr-10

Apr-11

Apr-12

Source: ABS 8731.0 and HIA