According to the latest HIA-Jeld-Wen New Home Sales Report, sales of new homes in the three months to October fell by 9% to be 17% lower from a year ago, with detached home sales down by 10% while transactions of multi-units inched up by 1%.
A slew of housing indicators ahead of the ill effects from the November interest rate hikes are pointing towards a residential construction slump, said HIA chief economist Dr Harley Dale.
"Fiscal stimulus has all but run its course. We now face a combination of higher interest rates, on-going severe credit constraints, and inadequate progress in addressing perennial supply side obstacles such as a lack of readily available, affordable land. These factors have rendered Australia's new home building recovery unsustainable," he said.
He noted that a credit shortage for small and medium-sized projects continues to impinge heavily on the country's property developing sector.
"Viable measures are required to ensure greater competition in our banking system and they need to take into account the obstacle that a lack of credit presents to boosting Australia's housing supply," he added.
Nonetheless, sales in October grew by 2.4% after a downwardly-revised 1.7% drop in September.
Sales of detached homes rose 3% while multi-unit sales declined 2.6%.
Detached home sales increased by 7.4% in Queensland, 5.9% in Victoria and 0.9% in Western Australia, despite shrinking sales for the three months leading to October.
Meanwhile, in October sales volume declined by 6.1% in New South Wales and 1.3% in South Australia.
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