Australian Property News

Sale of new homes rising

Posted on Thursday, March 03 2011 at 3:23 PM

More investors are gaining confidence and buying new homes, according to the Housing Industry Association (HIA).

Figures show new home sales posted a modest rise in January, increasing by 2.5 per cent. Detached house sales increased by 2.2 per cent, while the sale of multi-units also rose by five per cent.

HIA chief economist Harley Dale says the increase in home sales is encouraging.

"Following a protracted period of depressed building activity in New South Wales, there are early indications that the industry could be lifting itself off the canvas," Dale says.

New South Wales had a particularly good month, with detached new housing sales increasing by 10.3 per cent. Victoria also showed an increase in confidence, (9.6 per cent) along with Western Australia (6.3 per cent). However, sales fell by 2.6 per cent in Queensland, a result likely to have been influenced by the floods. Sales in South Australia also fell by 6.3 per cent.

"New dwelling starts are expected to be lower in 2011," Dale says.

"However, the prospect of official interest rates holding for some time, signaled yesterday by the Reserve Bank, could help to mitigate the decline in new dwelling starts and slow further widening in Australia’s new housing shortage."