In what is being welcomed as a further positive sign for the residential construction industry, sales of new homes in Australia have bounced back to reach their second highest level in almost two years.

On a seasonally adjusted basis, the number of new homes sold throughout the country rose by 3.4 per cent in August to reach almost exactly 6,500 according to the latest New Home Sales report from the Housing Industry Association (HIA).

That marks the second highest number on record since November 2011.

A resurgent detached housing sector continues to lead the way, with a 5.8 per cent jump in sales volumes more than making up for an 11.2 per cent drop in sales of newly constructed multi-units and apartments.

HIA chief economist Harley Dale welcomed the report, saying momentum was evident in New South Wales and Western Australia along with an improving trend in South Australia and that there are clear signs of strengthening in the detached housing segment.

Dale warned, however, that there was a downward trend in multi-residential building, and that based on current indications, new home construction levels will fall short of what the Australian economy needs in 2013/14.

private new dwelling sales

“There is clear upward momentum in both new home sales and building approvals for detached houses in 2013, which is being countered to an extent by a significant downward trend for multi-units,” Dale said. “We need to see this detached house trend accelerate over the remainder of 2013, while evidence of a base forming in the leading indicators for non-detached housing will also be crucial to observe.”

In terms of major states (detached houses only), all experienced a seasonally adjusted increase in sales in August, with Western Australia leading the way (up 10.2 per cent) followed by South Australia (8.2 per cent) New South Wales (7.4 per cent), Queensland (3.6 per cent) and Victoria (2.4 per cent).

WA’s strong result follows last week’s release of the Housing 100 report, which showed that seven of the nation’s top 20 home builders as measured by volume of dwellings commenced were headquartered in that state.