New home sales have fallen for a second straight month, but it should be just a cyclical downturn with signs of a possible rebound when the home-building boom ebbs.
New homes sales fell 4.4 per cent in May, following a drop of 4.7 per cent in April, the Housing Industry Association’s data shows.
Detached house sales slipped 6.7 per cent, but multi-unit sales jumped 4.7 per cent in the month.
“There is nothing alarming about a reversal in the trend for new home sales,” HIA chief economist Harley Dale said in a statement on Wednesday.
He forecast the current home-building boom will wane in 2016/17 and 2017/18. After that, he expects more completed homes to come onto the market again, with an accompanying lift in sales.
“There is a cyclical downturn ahead for new residential construction activity, as new home sales signal, but the early pull-back will be mild by historical standards,” Mr Dale added.
NSW and Queensland posted the sharpest monthly fall in detached house sales, dropping 11.5 per cent and 11 per cent, respectively, in May.
Detached home sales in Victoria fell 8.2 per cent.
Meanwhile, in Western Australia sales jumped 5.4 per cent and in South Australia they were up 3.8 per cent.