New home sales in Australia enjoyed a boost during the first month of 2014, following a small decline at the end of last year, new data shows. January saw a 0.5 per cent rise, according to the latest report from the Housing Industry Association (HIA).
The research revealed that sales of new detached houses increased by 0.3 per cent in January, while multi-unit properties figures were bolstered by 1.6 per cent.
Shane Garrett, senior economist at the HIA, explained that new home sales have actually been on a steady increase since the third quarter of 2012, due to a mixture of falling interest rates and a return to confidence in the housing market.
“The return of house price growth to most cities has done much to oil the market and allow transactions to start occurring in greater numbers,” he said. Mr Garrett also noted that compared with the same month in 2013, new home sales were up some 17 per cent. In addition, the three months to January saw a yearly rise of 22.3 per cent on the previous annum.
Furthermore, the report forecasts around 165,000 commencements in 2014, and around 168,000 starts next year. It also points to a general trend of stronger sales activity over the next few years.
Despite this positive outlook, Mr Garratt emphasised that the new home sales recovery has not worked its magic in all Australian states. With this in mind, state governments must put sustaining the housing market recovery near the top of their agendas when framing budgets, he said.
Indeed, substantial regional variations were seen in sales of new homes. For example, new private detached house sales rose by 10.9 per cent in Victoria, and 0.4 per cent in Queensland. However, in South Australia, sales of these dropped by 6.4 per cent in New South Wales and 1.9 per cent in Western Australia.