New home sales slumped in November, suggesting deep interest rate cuts and a government stimulus may take time to lure buyers back into the market. Queensland reported the biggest dive.
Sales of new houses nationally fell by 1.1% in November, the Housing Industry Association said, compared with a 3.1% increase in October.
"A lack of available credit and general economic uncertainty saw investors sitting on the sidelines in the second half of 2008," said HIA chief executive Chris Lamont, in a statement.
The Reserve Bank's interest rate retreat late last year, slashing the cash rate from 7.25% to 4.25% in the space of four months, is aimed at re-igniting demand in the economy, particularly in the housing sector. The government announced in October a tripling of the first-time home buyers' grant, which came into effect last month, as part of a $10.4 billion stimulus plan.
Consumers, however, remain wary of the gloomy outlook for jobs and slowing growth, analysts say.
Nationwide homes sales edged down 0.4%, while apartments and duplex dropped 5.3%, a victim of the credit shortage.
The once red-hot Queensland housing market tumbled, with new homes sinking 10.1% in November, as the outlook for the resource-based economy whithered. Queensland's fall obliterated increases seen in the four mainland states.
Western Australian new home sales gained nearly 8%, followed by New South Wales which increased 3.8%,
In South Australia new home sales nudged up 1.8%, while Victoria's eked out 0.9% growth for the month.
"The overall profile for new home sales remains weak, although there is early evidence of an improvement in Victoria and a stabilisation in Western Australia," said Mr Lamont.