Rate cuts boost new home sales
New home sales have risen for a second straight month as buyers headed into the property market on the back of lower interest rates and state government assistance, a report says.
The Housing Industry Association (HIA) report released on Wednesday said new home sales were up 4.7 per cent in November, on the back of a 3.4 per cent increase the previous month.
Although encouraged by the November figures, HIA economist Geordan Murray cautioned that new home sales were still quite low, given sales volumes for the three months to November were down 15.7 per cent compared with the prior corresponding period.
Mr Murray said there was ‘‘a long way to go before we could consider sales volumes to be at satisfactory levels’’.
‘‘Against the back drop of late 2012 when we had lower borrowing rates combining with a number of states encouraging new home building through amendments to first home buyer assistance, it is promising to see new home sales moving in the right direction,’’ Mr Murray said.
The Reserve Bank of Australia delivered a 25 basis point interest rate cut in October, and lowered the cash rate by a further 25 basis points to three per cent in December.
The November result was led by sales of detached houses, which snapped five consecutive months of declines to rise 7.7 per cent in the month. Sales of apartments and other multi-unit dwellings, which were traditionally more volatile, fell 6.9 per cent in November, the HIA report said.
Mr Murray said it was widely acknowledged a ‘‘broad based rejuvenation’’ of new home building was important for maintaining the health of the overall Australian economy.
‘‘But at this stage, new home sales sits among a host of indicators that are yet to provide conclusive evidence that we are on track to achieve this,’’ Mr Murray said.
The number of detached houses sold in New South Wales rose by 15.8 per cent, while they were 15.6 per cent higher in Victoria and 6.7 per cent higher in South Australia.
They declined 6.7 per cent in Western Australia and were down 0.1 per cent in Queensland.