SYDNEY, Oct. 31 (Xinhua) -- Australian new home sales fell in September, led by a significant drop in new apartments sold, latest industry figures showed.
The sales fell 6.1 percent month-on-month, continuing a decline since 2015, according to a media release from the Housing Industry Association on Tuesday.
Sales of new apartments, which are favored by many investors, dropped 16.7 percent, while that of new detached houses fell 4.5 percent.
Analysts have pointed to an oversupply in some of Australia's major cities in the east, tightened lending and greater restrictions on foreign investment as some of the reasons behind the recent drop.
Housing Industry Association Senior Economist Shane Garrett told Xinhua the most pressing reason behind the drop in new apartment sales was the restrictions introduced on foreign investors who wish to purchase Australian residential property, in the form of "very severe stamp duty and surcharges", particularly in New South Wales and Victoria states.
The stamp duty and surcharge on overseas buyers is 8 percent in New South Wales, 7 percent in Victoria and 3 percent in Queensland. Foreign, non-resident investors are allowed to purchase only new or "off-the-plan" homes in Australia.
More than one-quarter of new homes built in New South Wales were being bought by foreign buyers, with Chinese citizens making up nearly 90 percent of them, research from financial group Credit Suisse showed earlier in October.
New home building in Australia is expected to see a reduction in the next two years but its economy will need about 180,000 new homes a year in the long term, Garrett said.
"The reduced amount of new home building activity will tend to reinforce prices because there will be less new supply coming onto the market."
Home prices in Sydney in particular but also in Melbourne have grown significantly in the past year "but the capacity for them to continue growing at such a fast pace won't remain over the next couple of years ... the lower dwelling stock entering into the market will tend to ensure that price growth remains, although at a more moderate pace", he said.
