New Home Sales Hit 27 Month High

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Wednesday, October 30th, 2013
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Australian New Home Sales Reach 27 month high
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The recovery in construction activity in Australia continues to gather momentum as new data shows monthly sales of new or newly constructed homes at two year highs.

The recovery in construction activity in Australia continues to gather momentum as new data shows monthly sales of new or newly constructed homes at two year highs.

On a seasonally adjusted basis, the number of new homes sold throughout the country surged 6.4 percent in September to reach their highest level on record since June 2011 (see chart), according to the latest New Home Sales report from Housing Industry Association (HIA).

The gain represented the highest single month increase on record since April last year. New home sales have now risen for ten of the past twelve months.

Housing Industry Association Chief Economist Harley Dale welcomed the figures.

“Total new home sales reached their highest level in over two years in September 2013” Dale says. “Given the recovery in sales is occurring from a record low and that the upward momentum appeared to be stalling in mid-2013, this September outcome is very positive.”

Housing Industry Association Activity

The figures also underscore evidence of a short-term push back toward the lower density segment of the market.

Whilst last month’s jump was largely driven by a 19.9 percent spike in multi-residential sales, sales in this segment were actually down 5.7 percent on a quarterly basis (seasonally adjusted) and were flat compared with the same period last year.

Detached house sales, by contrast, (up 4.5 percent for the month) grew by 3.7 percent in the September quarter and were up more than a quarter (25.2 percent) compared with the same period last year – albeit with sales in this segment being below long-term trend in each of the main states except Western Australia.

In September, Housing Industry Association Economist Diwa Hopkins told Sourceable there was significant potential for growth in low-density housing coming off a weaker base which had seen a trend toward multi-residential dwellings over the past decade – comments which followed the release of a HIA research notes showing a surge in building approvals for semi-detached housing during 2012/13 at the expense of multi-story dwellings.

The latest figures follow Wednesday’s release of the HIA Trades Report, indicating the overall shortage of residential construction tradespeople had eased and some segments were now in moderate shortage again.

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