New home sales, including houses and units, fell 1.3 per cent for the month of December, the Housing Institute of Australia (HIA) yesterday revealed.
The institute attributed higher interest rates and pressure on home prices to the decline. A 2.9 per cent drop in the sale of detached houses outweighed a 5.1 per cent rise in apartment sales.
Overall new home sales declined by 0.3 per cent in 2007 over the previous year – the fourth weak year in a row.
Chief economist of the HIA Harley Dale warned that the new home building sector is now in danger of a fifth weak year given the current upward pressure on interest rates.
He also expressed the need for an additional 20,000 dwellings per year to meet the current demand for housing.
“Another year where there is no catch up made in the yawning gap between housing supply and demand will only serve to extend the existing problems of very tight rental markets and deteriorating housing affordability,” Mr Dale said.
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