New dwelling sales cooled over 2017

“Building approvals are also down over this time frame by 2.1 per cent for the year.

“This is a smaller downturn than we anticipated and bodes well in terms of the likelihood of a modest and orderly reduction in new house building.”

However, Mr Reardon said that this is not a uniform trend across every state, “with Western Australia and Victoria providing the book ends on five very different stories”.

“In the middle of the year, it looked like Western Australia had turned the corner after a significant decline in activity over three years, but the new financial year brought even lower results as more restrictive first home buyer policies were implemented,” Mr Reardon said.

“At the other end of the market in Victoria, the expected slowdown in building activity has not yet materialised. Sales of new houses increased by 6.3 per cent for the 12 months to November 2017 and approvals rose by a further 8.7 per cent in the three months to November compared with the same period in 2016.

“We do not anticipate that the market will grow in 2018. In fact, we expect that the market will continue to cool as subdued wage pressures, lower economic growth and constraints on investors result in the new building activity transitioning back to more sustainable levels by the end of 2018,” concluded Mr Reardon.

The results of this report follows predictions made by HSBC Global Research, who foresee an overall housing cooldown in 2018.

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