New home sales hit a 15-year low in August, according to the latest figures from the Housing Industry Association.
The HIA said new homes sales dropped 5.3% in August, following a 5.6% decline in July.
The announcement comes just one day after the RBA announced a 25 basis point cut in interest rates, a move that will hopefully give some life to the property sector.
“New home sales for August are the latest in a string of soft new housing updates for this financial year, and that follows a very weak year for new home building in 2011-12,” HIA chief economist Harley Dale said in a statement.
“Indeed, following two consecutive years of decline in new housing starts over 2010-11 and 2011-12, and leading indicators pointing to weakness extending into 2012-13, policy settings in August 2012 were clearly inappropriate.”
Trade deficit wider than expected
Australia’s trade deficit expanded by more than an expected amount, according to the latest ABS figures.
The data shows the trade deficit widened 32% to a seasonally adjusted $2.02 billion, following a revised deficit of $1.53 billion in July.
Services sector contracts in September
The services sector continued to shrink in September, according to the latest figures from the AIG-Commonwealth Bank performance of services index.
The index fell 0.5 points to 41.9 in September, below the 50-point level separating expansion from contraction.
The rate cut was a good sign but more support is necessary, AIG chief executive Innes Willox said in a statement.
“This easing in monetary policy should help build momentum behind the tentative signs of improvement this month in activity in health and community services and accommodation, cafes and restaurants and reduced rates of contraction in other household-related sub-sectors, including retail and wholesale trade,” he said.
“However, at the same time, the overall state of the services sector, which is being squeezed between low selling prices and rising costs, including from the carbon tax, suggests that further rate reductions will be needed before the sequence of negative news is reversed.”
This article was first published on LeadingCompany’s sister site, SmartCompany.