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The recent improvements in housing market sentiment has helped spur a rise in new home sales, which lifted for the first time in 18 months, new research has revealed.
According to the latest research from the Housing Industry Association (HIA), which involves a monthly survey of the largest 100 Australian building companies, new home sales increased by 0.8 per cent in the three months to 30 June 2019, signalling the first quarterly rise since December 2017.
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On a state by state basis, the sharpest increase in home sales was in Victoria (5.1 per cent), followed by Western Australia (2.9 per cent) and South Australia (2.6 per cent).
In contrast, new home sales declined in Queensland (8.9 per cent) and NSW (1.7 per cent).
Further, in annual terms, new home sales remained in negative territory, down 12.4 per cent when comparing the 12 months to June 2019 to the previous corresponding period.
Nonetheless, the HIA’s chief economist, Tim Reardon, observed that the bump in new home sales over the June quarter is yet another sign of a stabilisation in the housing market.
“The small improvement in sales in the June quarter suggests that the decline in new home sales that has been underway for more than a year has started to ease,” he said.
Mr Reardon said he expects recent political and economic development to place further upward pressure on activity in the market.
“Two interest rate cuts, a tax cut and repeal of regulatory restrictions encourage increased activity in the home building market,” Mr Reardon said.
“These measures, combined with ongoing stable population and employment growth should see new home sales improve toward the end of the year.”
[Related: Aussies sitting on the fence as housing sentiment shifts]
