Australia May new home sales fell 5.7 pct-industry

SYDNEY, June 30 - Sales of new houses in Australia fell in May, with buyers taking a break after four months of gains, an industry survey showed on Tuesday.

The survey of 100 major builders from the Housing Industry Association showed total sales of new homes dropped 5.7 percent in May, seasonally adjusted, from the previous month. Sales in the volatile apartment sector rose 6.1 percent, reversing a drop in April.

Overall sales were still up 15 percent on their low point in December, thanks in large part to historically low mortgage rates and government grants to first-time home buyers.

"The combination of low interest rates and the $21,000 First Home Boost have lifted prospects for the housing industry, which is expected to convert to a recovery in home building activity from the June quarter of 2009," said HIA senior economist, Ben Phillips.