Login
ISCOVER
Staff Reporter
New home sales continue to increase, suggesting the property market is well into its recovery phase.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
According to the latest Housing Industry Association (HIA) New Home Sales Report, seasonally-adjusted new home sales increased by 3.9 per cent in April 2013, taking monthly sales back to a level not seen in over a year.
The headline result was driven by a 6.7 per cent lift in detached house sales, experienced across all states covered by the survey bar Queensland.
In contrast, multi-unit sales fell by 9.4 per cent.
“Overall, recent developments in new home sales are encouraging. In particular, the important detached house segment of the market continues to climb out of recent record lows, and this improvement has largely been broad-based across the states,” HIA senior economist Shane Garrett said.
“While multi-unit sales have softened over recent months, the gains made over the course of 2012 have not been eroded. A broader look at the situation shows that the volume of sales in the three months to April this year is still 51.7 per cent higher than the trough experienced a year earlier.
“We do, however, need to be considering the longer term prospects of a recovery in residential construction beyond 2013.
“The economy is amidst a transition away from growth driven by mining and related investment and the consensus aspiration is for residential dwelling investment to fill the ensuing hold. While we share this aspiration, we don’t have strong evidence that this will actually be achieved.
“There are still major obstacles to recent improvements in residential construction developing into a sustained recovery. Households remain cautious and are still using lower interest rates to hasten debt repayment rather than engage in spending. On the other side of the housing ledger, home builders and residential developers are facing tight credit conditions, hampering the number of projects that proceed to sale and building commencement.
“For a recovery to be of the duration and magnitude required not only by the economy, but by Australia’s housing needs, governments of all levels, led by the federal government, need to take decisive policy action to address these obstacles.”
