Morning Briefing: New home sales mark fall for second straight month

Demand for new housing continues to wane... Pain increases as loss-generating resales rise...

Morning Briefing: New home sales mark fall for second straight month
New home sales mark fall for second straight month 
Demand for new housing is continuing to wane, with figures showing new home sales fell in May for the second straight month.

Released this week, figures from the Housing Industry Association’s (HIA) May New Home Sales Report show new home sales fell 4.4% in May, a slightly smaller fall than the 4.7% decline seen in April.

The May fall was driven by a fall in sale numbers for new detached dwellings, which declined 6.7% over the month.

New multi-unit dwellings saw a 4.9% increase in sales over the month.
HIA chief economist Harley Dale said there was “nothing alarming” in the overall decline in sales and the slowdown was a predicted part of the residential construction cycle.

“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,” Dr Dale said.

Pain increases as loss-generating resales rise 
The vast majority of Australian’s who resold a property during the first three months of 2016 came away with a profit, though the proportion of people who lost money on their deals grew.

Released this week, CoreLogic’s latest Pain & Gain Report, which measures the profits and losses of sellers by comparing the most recent sale price of a property to its previous sale price, showed that 90.8% of properties resold over the March quarter delivered a profit.

Over the quarter just 9.2% of properties were resold at a loss; however that is up from the 8.3% of resales that came at a loss in the December 2015 quarter and the 8.8% recorded over the March 2015 quarter.

Over the quarter, the total value of residential real estate resold at a profit was $12.9bn, with the average gross profit recorded at $239,855.

(Your Investment Property)