New home sales declined in September with detached house sales posting their lowest monthly level since December 2000, according to the latest HIA - JELD-WEN New Home Sales Report.

The survey of Australia's major residential builders showed that the number of new homes sold in the month of September fell by 3.5 per cent to be down by 14.0 per cent over the September quarter.

Detached house sales fell by 3.3 per cent in the month of September 2011 to be down by 15.3 per cent over the September quarter. Sales of multi-units fell by 5.5 per cent in September.

Victoria posted the largest monthly fall with sales declining by 6.6 per cent in September.

"The volume of detached house sales improved in Queensland with a rise of 5.7 per cent in September, but sales fell in each of the other four mainland states," said Harvey.

In terms of the other states, detached house sales fell by 4.7 per cent in New South Wales, 5.9 per cent in South Australia, and 3.5 per cent in Western Australia.??

Building approvals

Meanwhile, building approvals fell sharply in September, according to Master Builders Australia. Chief economist Peter Jones said it confirms the building industry is remains in the slow lane of the economy.

“As expected, the previous month’s bounce in private sector dwelling approvals was reversed in September and the value of non-residential building also fell sharply.”

September quarter residential approvals are down seven per cent on last year, with non-residential approvals down six per cent over the same period following a massive 30 per cent fall in 2010/11.

“The latest building approval figures are in line with the findings of Master Builders’ September quarter national survey that revealed just how tough the business environment had become for an industry that has lost the cushioning effect of government stimulus programs.”

“Sales and forward orders have fallen away dramatically in the past six to nine months as cautious clients, overseas events and difficulties accessing finance work against any upturn.”

He said, “The immediate challenge ahead for the building sector is to restore confidence to drive a private sector recovery in both the housing and commercial building markets”