Interest Rate ThreatMortgage Interest rate threat hurts new home builders and new home sales by stalling home buyers decisions.Speculation of a mortgage interest rate rise has stalled the recovery in the new home housing market, the HIA said today.
The Housing Industry Association (HIA) survey showed new home sales were flat in March, holding level at 8191 dwellings.
Newly constructed detached house sales increased by a 0.2 per cent in the month, while the sale of multi-units fell by two per cent.
Sales in the first quarter of 2007 were 16 per cent lower than in the three months to March 2006.
HIA said speculation of an interest rate increase had discouraged would-be buyers and investors, and any upward momentum in new home sales had now stalled.
HIA chief economist Harley Dale said higher levels of home buyer interest, usually seen early in the year, were already giving way in 2007 to the large gap between the desire for home ownership and the ability to afford it.
Insufficient state and federal government action to address low housing affordability were preventing a sustained recovery in the housing sector, Mr Dale said.
"The recent threat of higher interest rates has only served to reinforce the urgency required in addressing the hefty structural barriers to home ownership," he said.
New home sales rose in December, January and February.
The sales tally for March is below the level of a year earlier when about 10,000 dwellings were sold.
HIA's new home sales survey is compiled from a sample of the largest 100 residential builders.
Source: AAP
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