August 29, 2013 / 1:07 AM / 4 years ago

Australia new homes sales dip in July after 5 months of gains

SYDNEY, Aug 29 (Reuters) - Sales of new homes in Australia fell in July, an industry survey showed on Thursday, though that followed five straight months of gains which had taken sales to their highest in 19 months.

The Housing Industry Association (HIA) said its survey of large builders showed sales of new homes dropped a seasonally adjusted 4.7 percent in July. Sales of new detached houses fell 6.4 percent, overshadowing a 7.2 percent increase in the volatile multi-unit sector.

"There has been strong upward momentum to new home sales since the record lows plumbed in 2012. One monthly fall, while disappointing, does not really change the story," said HIA chief economist Harley Dale.

The Reserve Bank of Australia has been counting on a revival in home construction to help support the economy as a long boom in mining investment finally peaks this year.

Record low interest rates have led to a pick-up in home prices and clearance rates at auctions, though approvals to build new homes have not been as strong as in past recoveries.

"To be confident that actual new-home construction will grow in 2013/14, we need to see clear and consistent evidence of further upward momentum in leading indicators such as new home sales," added Dale. (Reporting by Wayne Cole; Editing by Eric Meijer)

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