New home sales volumes in Australia remain well below par, according to new research released today by the Housing Industry Association.

The latest HIA - JELD-WEN New Home Sales Report, a survey of Australia’s major residential builders, showed that the number of new homes sold in May 2011 eased by 0.2 per cent to leave sales volumes well down on their average for the last twenty years.

"Leading indicators of new home construction are universally weak and unfortunately the May update for new home sales is no exception,” said HIA Chief Economist, Dr Harley Dale.

Detached house sales fell by 2.4 per cent in May 2011 reflecting declines in New South Wales, Victoria, South Australia, and Western Australia. The volatile units sector posted a decent monthly increase of 23.3 per cent, but even this result was insufficient to prevent an 8 per cent decline in unit sales over the three months to May.

“The combination of supply side obstacles which include a lack of available finance, and softer demand which is not helped by incessant chatter about a fictitious house price bubble, is reflected in new home building indicators being well down,” Harley Dale said. “In the absence of policy action it is hard to see this situation turning around in the foreseeable future.”

In May 2011 the HIA – JELD-WEN New Home Sales Report found that detached new house sales fell by 7.8 per cent in New South Wales and were down by 6.7 per cent in Victoria, 3.2 per cent in South Australia, and 6 per cent in Western Australia. Sales increased by 19 per cent in Queensland from a very low base.