In another ominous sign for Australia’s property market, new home sales sagged again in November 2015, according to the Housing Industry Association’s (HIA) latest report.

A confluence of factors is driving a decline in leading indicators of new home construction. The lagged effect of slowing population growth, an up-tick in variable mortgage costs, over-reach on the part of APRA’s credit controls, and an easing in property price growth in Sydney and Melbourne are all in play,” said HIA Chief Economist, Dr Harley Dale.

New home sales fell 2.7% in November, in part driven by a massive 15.1% fall in multi-unit sales. Over the three months to November 2015, detached house sales fell 4.1%, while sales of multi-units dropped by 11.8%. (Multi-units are units contained in blocks).

new home sales chart

Credit: Housing Industry Association

Last year, the banking regulator Australian Prudential Regulation Authority (APRA) imposed measures on Australia’s big four banks to slow lending growth to property investors, as growth threatened to rise above 10%. Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) all imposed higher restrictions on investors – as well as raising their standard variable rates for owner-occupiers.

The measures have worked with growth in lending to investors falling to 0.4% in November 2015 – the equal lowest since June 2012, and well below the 11% year-on-year growth rate recorded in June 2015.

Property prices in Sydney and Melbourne are already showing signs of sliding, further deterring investors from entering the market.

Foolish takeaway

Property prices rise and fall at different rates across Australia’s capital cities. After seeing huge gains in the median housing value, Sydney and Melbourne, in particular, look set to see prices fall. Earlier this month, valuer WBP Property forecast prices in both capital cities to fall and by as much as 10% in the prestige segment.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.