Australian new home sales hit rock bottom

Despite a slight rise in demand for home loans in the first quarter of the year, new home sales have dropped to their lowest level since 1994.

According to new figures from the Housing Industry Association (HIA), transactions for new properties plummeted by 9.4 per cent in March – totalling just 5,443 sales.

This is despite a three per cent rise in sales the previous month.

HIA chief economist Dr Harley Dale said: "Leading housing indicators such as new home sales are pointing to on-going deterioration in already very weak new home building conditions."

Dr Dale added that the problems in the new-build housing market are having a knock-on effect on both the manufacturing and services sectors.

New home sales in Queensland dropped the furthest, falling by 15.3 per cent in March – three times more than the 4.6 per cent drop-off witnessed in Victoria.

Credit agency Veda recently found that the number of home loan enquiries climbed by 0.2 per cent in the first three months of the year. However, New South Wales saw a dramatic decline in interest during this period.

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