For the first time in five months, new home sales have taken a tumble.
The Housing Industry Association (HIA) has released its new home sales report and sales volumes fell 4.3 per cent in May.
HIA chief economist Dr Harley Dale said in the report there was little cause for concern in the drop.
“The overall profile for new home sales is a healthy one, given that May marks the first decline in new home sales this year,” he said.
“Sales grew by 3.8 per cent over the three months to May 2014 to be up by 21 per cent compared to the same period in 2013.”
And speaking to ABC News he said the overall healthy outlook was positive news for employment.
“There’s a powerful impact to a recovery in new home construction that feeds through into the labour market which feeds into other parts of the economy.”
Interestingly, a separate report from investment bank USB has found up to 40 per cent of new dwelling sales in Victoria and New South Wales may be overseas buyers.
Overseas buyers have become a key component of the new home sales sector. For the first three quarters of this financial year, foreign investment in Australian real estate hit a new high of $25 billion.
The figures mean overseas purchases of Australian homes will be a whopping 93 per cent higher than last year.
USB stated in their report that they believe the figures will remain high, especially while Australian house prices remain high and our dollar continues to punch above its weight.
They also stated that they believe the high demand is largely attributed to foreigners pursuing a policy of international risk diversification in their investments.
“Importantly, foreign investment probably also raised the supply of housing (which adds to construction activity and jobs) – with a still likely net upward on prices – albeit concentrated in new (rather than established) housing,” the report said.