Australian new home sales fell 6% in October, the Housing Industry Association said.
The survey of major home builders showed its second consecutive monthly fall as the impact of government efforts to stimulate demand in the sector fade, HIA said in a statement.
Higher interest rates and less first home buyer activity prompted the retreat, said Harley Dale, chief economist at HIA.The number of sales of detached houses fell by 6.9% in October following a decline of 4.3% in September. The number of apartment sales increased by 2.4% in October, the fourth rise in six months but the volume remained at a historically very low level.
"A decent and sustainable new home building recovery needs strong momentum from private sector trade-up buyers and investors and we seem to be falling short on that score as we near the end of 2009," he said.
"It is looking like 2010 will be a year where the number of new homes built will fall well short of what is required to match Australia's rapidly growing population," Dale warned.