Soft sales on new homes concluded a disappointing financial year for the housing industry.
The latest figures released by HIA reveal a decline in new home and unit sales among Australia's largest builders and developers with only 8,321 dwellings purchased in June.
HIA chief economist Harley Dale called it a "supply-side issue", where demand for housing exists but remains relatively unaffordable. "By supply-side, I'm talking about the fees, taxes and charges that are levied on new housing developments largely borne by the individual - the homebuyer," he said.
Dale also sited the high price of land and its release as a contributing factor to waning sales over the last five to ten years. "You've seen a big increase in the cost of land relative to the overall house and land package," he said. "And we've also seen a very significant blow out in planning delays and the complexity of the planning process, which tends to add up on the additional costs of new housing."
HIA's figures showed a 20% drop in June, nullifying the improvements made in the previous two months. Sales ultimately fell by 12% over the 2006/07 financial year.