DEVELOPERS have resorted to offering cash incentives and no-deposit finance as they struggle to sell newly built homes in Sydney's outer suburbs.
Multi-million-dollar housing developments on the city's outskirts have taken the biggest hit, with three rate rises in the past year deterring prospective homebuyers.
Housing Industry Association figures show the number of new houses sold in NSW over the past 10 years has slumped by 50 per cent.
The trend continued last year with 14,121 new homes sold around the country, compared with 14,175 the previous year and 39,860 in 1998/99.
The national figures tell a similar story. Last year, 107,145 new homes were sold, down from 110,979 the previous year.
Half-empty streets and rows of for-sale signs are common at some of the multi-million-dollar estates in outer Sydney as developers turn to lavish gifts and no-deposit finance to attract buyers.
Some estates are offering cash incentives of up to $10,000, no-deposit finance, fixed interest rates or free extras such as air-conditioning.
Only 951 new homes were sold in NSW in December, 2006 - down from about 1127 in December, 2005.
Simon Tennent, executive director of housing and economics for the Housing Industry Association, said Sydney prices were driving young couples and families out of the homebuyer market.
"I'm not surprised (at the fall in NSW), with the price of land in Sydney's growth areas,'' he said.
"And at the end of last year, the three interest rate rises and nerves over other prices, like petrol, just took the wind out of the sails.''
HIA figures show the median block of land in Sydney costs about $325,000 while a similar-sized block in Melbourne costs only $150,000.
"I'm not surprised that some estates are struggling,'' Mr Tennent said. "These are great quality homes on excellent estates, but do the simple maths and you can't afford them.''
The Sunday Telegraph visited several major developments last week. One street in Prestons has 19 houses for sale. At another development site, only 32 of 54 lots had been sold - five in the past four weeks.
Michael McNamara, of Australian Property Monitors, said the new estates had become an unattractive option for those working in the city.
"People just don't want to live there,'' he said. "It's so difficult to get from the outer suburbs of Sydney to the city.''
Wind out of sales The Daily Telegraph