As one of the first regular round of industry numbers to be released following the rate rise, the outcome does not bode well for a demand side recovery that analysts had anticipated would kick off later this year.
"This is a very untimely situation to be in given there is already insufficient supply of housing stock to satisfy demand," said chief economist of the HIA, Harley Dale.
While the sales of units remained fairly stable during May, dipping slightly by a mere 2.9%, the overall result was adversely affected by a nosedive in the sale of new homes, which were down 11% in the month.
Dale is doubtful of the ability for a recovery in sentiment -which would indicate a willingness of investors to return - in the months ahead. "Sales volumes are likely to be subdued in the months ahead as higher interest rates and concern over a possible further hike exert a negative impact on the supply of new housing," he said.
Around the nation, house sales fell by 17.8% in New South Wales and by 13.9% in Queensland, 12.2% in Western Australia and 6.2% in South Australia. In contrast, sales of new detached houses in Victoria nudged up 4.1%.
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