New detached house sales rise 6.2% over 3 months

89An increase in new home sales in Australia shows demand remains positive, according to figures released on March 3 by the Housing Industry Association (HIA).

Overall, new home sales increased 0.5 per cent in January.

This indicates that market activity is moving ahead – not only good news for homeowners and investors but also for the broader economy.

Trends in New South Wales

While the month of January alone saw a drop in new detached house sales in NSW (-6.4 per cent), three-month long trends in the eastern state are a lot more promising.

In the three months to January, new detached house sales increased 6.2 per cent in New South Sales.

It’s plausible that this could be driven by strong activity in Sydney, where capital house prices soared by 15.1 per cent year-on-year during 2013, according to Australian Property Monitors.

The city performed strongly in the final quarter with a 6 per increase between the September and December quarters.

The strength of new detached house sales is consistent with overall home sales and ahead of stratified median prices for units in the city.

Even so, units have also been a popular option and with an increasing population putting pressure on the city’s housing stocks, the uptake of high density housing could soon catch up with houses and townhouses.

Positive increase attributed to low cash rate

Australia’s low cash rate has influenced borrowers’ interest rates, with HIA Senior Economist Shane Garrett noting that “new home sales have been rising pretty steadily since the third quarter of 2012, encouraged by the falling interest rates and the return of confidence to the housing market.”

However, he did offer a cautious comment, too.

“State governments will be framing their budgets in the coming months, and it is vital that their policies work to sustain the housing market recovery,” stated Mr Garrett.

Leave a Reply

Your email address will not be published. Required fields are marked *