Low home sales 'reflect a dire lack of confidence'

Poor home sales in September 2012 highlight a "dire lack of confidence" in Australia's property markets, according to the Housing Industry Association (HIA).

The organisation revealed that overall transactions were down by 3.7 per cent – the third consecutive month that sales have tumbled.

Detached house sales have been particularly weak and the multi-unit market is also struggling.

Although home loan interest rates have dipped significantly since November 2011, HIA chief economist Harley Dale believes that "households remain reticent to actually make a decision to buy".

The Commonwealth Bank announced earlier this week that Aussies are still being very careful with their money despite the 25-point reduction in the national cash rate made at the start of October.

Mr Dale feels the Reserve Bank of Australia needs to take further action in November to encourage more people to take on mortgages.

"A renewed easing of rates in October that is not followed up could add to household uncertainty and, perversely, further damage confidence," he remarked.

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