New home sales dropped 5.7 per cent in May, according to data from a Housing Industry Association (HIA) survey.
The HIA survey said the decrease in sales may serve as a reminder that sustained recovery in home building cannot rely on first home buyer activity.
HIA senior economist, Ben Phillips, said the findings, though disappointing, were not all doom and gloom.
“The combination of low interest rates and the $21,000 first home boost have lifted prospects for the housing industry, which is expected to convert to a recovery in home building activity from the June quarter of 2009,” Mr Philips said.
“The vast majority of the housing recovery has been at the first home buyer end of the market. As that segment inevitably slows over the remainder of 2009 it’s vitally important that the much larger trade-up and investor segments return to health.”
Detached new home sales decreased 9.9 per cent in New South Wales, 8.7 per cent in Victoria, and 13.5 per cent in Western Australia.
Sales grew by 2 per cent in Queensland and 3.6 per cent in South Australia.
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