Rate cuts and incentives fail to boost new home sales

New home sales recorded a disappointing decline in November 2008, despite interest rate reductions and first home buyer incentives from the government.

According to the Housing Industry Association (HIA), new home sales fell 1.1% with the multi unit sector recording an especially weak 5.3% decline. Detached houses on the other hand eased by 0.4%.

Chris Lamont, HIA chief executive, said activity in the second half of 2008 reflected the general slowing of the economy and the difficulties faced in securing finance for new construction projects.

“A lack of available credit and general economic uncertainty saw investors sitting on the sidelines in the second half of 2008 and this is now showing up in very weak updates for the multi-unit market,” he said.

Mr Lamont said further government stimulus and improved credit availability would assist in a recovery in the market.