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New home sales decline
Released 3 August 2010

New home sales weakened further in June, reinforcing the case for a period of sustained interest rate stability, according to the Housing Industry Association (HIA).

The latest HIA - Jeld-Wen New Home Sales Report, a survey of Australias major residential builders, showed that the number of new homes sold fell by 5.1% in June.

Detached house sales fell by 6.6% nationally in June, with NSW outperforming the rest of the country with a fall of 2.2%, compared to 10% decline in Victoria, 5.2% loss in Western Australia and 5.1% drop in Queensland.

HIA chief economist Harley Dale said that with monetary and fiscal policy stimulus being phased down, new home affordability was bearing the brunt of high-cost regulation.

Lack of readily available land and hefty infrastructure charges have combined with a chronic lack of development finance to put the brakes on sales and development activity, said Harley Dale.

Concerted action is required to reduce the impact of regulation, development charging, and excessive taxation on the cost of new housing supply. Inaction means that Australias dwelling shortage will continue to increase, pushing up existing house prices and disadvantaging households seeking to purchase or rent a dwelling.

The results come ahead of the Reserve Bank of Australias board meeting today where it is expected to leave interest rates on hold at 4.50%.