Sales of flats, townhouses and semi-detached houses were up 15.9 per cent in June.

Sales of flats, townhouses and semi-detached houses were up 15.9 per cent in June. Photo: AFR

The housing market continues to strengthen, albeit at a more moderate pace, helped by a surge in multi-unit dwellings.

New home sales were up 1.2 per cent in June, seasonally adjusted, and were up two per cent in the June quarter, the Housing Industry Association (HIA) said on Tuesday.

HIA chief economist Harley Dale said new home sales were strong across Australia with four out of the five mainland states recording increases.

"The new home building sector will provide a healthy contribution to broader economic growth in 2014/15," he said.

However, Dr Dale said, a lack of land to build apartment blocks could dampen new home sales growth in the coming months.

"As the recovery enters its third year, the magnitude and duration of the current new home building upcycle is less certain," he said.

"The share of medium- to high-density construction is higher and there are considerable delays occurring in the availability of titled land for detached and semi-detached housing."

Sales of flats, townhouses and semi-detached houses were up 15.9 per cent in June while sales of new detached houses fell one per cent.

AAP