New home sales suffered their biggest monthly decline in five years in June.
The latest Housing Industry Association - JELD-WEN New Home Sales Report, a survey of Australia's major residential builders, showed that the number of new homes sold in June 2011 dropped by 8.7 per cent, the sharpest monthly decline since May 2006.
The biggest fall was in Queensland, where sales fell by 17.1 per cent, developers blaming this in part on the state government's recent announcement of a $10,000 grant which will be offered to anyone purchasing a new home valued up to $600,000 under a $140 million program from August 1 to January 31.
Overallm the report found that detached new house sales fell by 1.8 per cent in New South Wales, 10 per cent in Victoria, 17.1 per cent in Queensland, and 6.3 per cent in Western Australia. Sales were flat in South Australia.
"There has been widespread anecdotal evidence for some time that new home demand hit a wall in mid-2011 and today's new home sales figures unfortunately confirm that situation," said HIA Chief Economist, Dr Harley Dale. 
"Evidence is mounting that weakness in the new home sector is accelerating even with interest rates on hold."
In the month of June 2011, detached house sales fell by 8.8 per cent, the second consecutive fall. The volatile units sector fell by 8.1 per cent in June following a jump of 23.3 per cent in May.
Dale added: "In terms of government action, reducing the excessive costs of new housing is an important area of the domestic economy to focus on. The upcoming Tax Forum in early October offers a golden opportunity to reduce the high and inefficient taxation of a basic necessity, shelter, and therefore boost new housing supply.”
