New home sales climb

New home sales posted a second consecutive monthly improvement in November 2012, according to the Housing Industry Association (HIA).

The improvement was driven by a lift in sales of detached housing, according to a statement from the association.

The HIA New Home Sales report showed a 4.7 per cent increase in new home sales in November 2012. Sales of detatched houses increased by 7.7 per cent, following a run of five consecutive montly declines.
Lower borrowing rates combined with changes to first home buyer assistance in various states were largely responsible for the improvement.

The positive result in November was driven by the detached house segment of the market which experienced a trend decline in sales throughout most of 2012. This result should provide some welcome respite. Despite the improvement, more needed to be done.

While the increase in the month of November is encouraging, new home sales remain at quite low levels. If we consider the three months to November, the volume of sales is 15.7 per cent lower than in the same period in 2011. This overall profile shows that we have a long way to go before we could consider sales volumes to be at satisfactory levels.

The importance of a broad based rejuvenation of new home building to maintaining the health of the overall Australian economy has been widely acknowledged, but at this stage, new home sales sits among a host of indicators that are yet to provide conclusive evidence that we are on track to achieve this.

In November, the number of seasonally-adjusted new detached house sales increased by 15.8 per cent in New South Wales, 15.6 per cent in Victoria and 6.7 per cent in South Australia. Detached house sales were down by 0.1 per cent in Queensland and declined by 6.8 per cent in Western Australia.


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