Tentative signs that the decline in new home building may have eased are emerging with the latest data showing a second consecutive monthly rise in new home sales.
Releasing the latest version of its New Home Sales report compiled according to a survey of the nation’s 100 largest volume home builders, Housing Industry Association (HIA) said that the seasonally adjusted volume of new homes sold throughout Australia increased by 5.7 percent in September.
This comes on top of a 7.3 percent rise during August and marks the second consecutive month of increases after sales had previously trended downward from the middle of 2017 until the middle of 2019.
Nevertheless, sales over the September quarter remained 1.5 percent lower compared with the June quarter.
HIA economist Angela Lillicrap welcomed the latest data.
“This improvement in sales is a welcome reprieve from the steady decline that emerged in late 2018,” Lillicrap said.
“It remains too soon to confirm that we have passed the bottom of the cycle, but this result does highlight that we are not likely to see further material falls in new home sales.”
The latest data follows the release of details of the Federal Government’s $500 million scheme to help first-home-buyers to enter the market.
Under the scheme, the Commonwealth will pay mortgage insurance usually charged against purchasers with deposits of less than 20 percent in cases where buyers have a deposit equivalent to five percent of the purchase price or greater.
The scheme’s impact will be limited, however, as it will apply only to 10,000 participants each year.
According to the ABC, there are around 110,000 first-home-buyers wishing to enter the market each year.
Nevertheless, Lillicrap says that with this, along with the easing of APRA lending restrictions and recent interest rate cuts, the improvement in new home sales will likely be sustained.