Some better this morning from HIA new home sales for April which show a good ongoing bounce from low levels.
The HIA New Home Sales Report for April 2013 shows the trend of recovery since late 2012 is continuing in 2013.
The HIA New Home Sales report, a survey of Australia’s largest volume builders, showed that total seasonally adjusted new home sales increased by 3.9 per cent in April 2013, taking monthly sales back to a level not seen in over a year. The headline result was driven by a 6.7 per cent lift in detached house sales, which was experienced across all states covered by the survey, bar Queensland. In contrast, multi-unit sales fell by 9.4 per cent.
“Overall, recent developments in new home sales are encouraging. In particular, the important detached house segment of the market continues to climb out recent record lows, and this improvement has largely been broad-based across the states,” said HIA Senior Economist, Shane Garrett.
“While multi-unit sales have softened over recent months, the gains made over the course of 2012 have not been eroded. A broader look at the situation shows that the volume of sales in the three months to April this year is still 51.7 higher than trough experienced a year earlier,” added Shane Garrett.
“We do, however, need to be considering the longer term prospects of a recovery in residential construction beyond 2013,” said Shane Garrett.
“The economy is amidst a transition away from growth driven by mining and related investment and the consensus aspiration is for residential dwelling investment to fill the ensuing hold. While we share this aspiration, we don’t have strong evidence that this will actually be achieved,” said Shane Garret.
“There are still major obstacles to recent improvements in residential construction developing into a sustained recovery. Households remain cautious and are still using lower interest rates to hasten debt repayment rather than engage in spending. On the other side of the housing ledger, home builders and residential developers are facing tight credit conditions, hampering the number of projects that proceed to sale and building commencement,” said Shane Garrett.
“For a recovery to be of the duration and magnitude required not only by the economy, but by Australia’s housing needs, governments of all levels, led by the federal government, need to take decisive policy action to address these obstacles,” said Shane Garrett.
In the month of April 2013 detached house sales increased by 9.1 per cent in Victoria, 9.0 per cent in Western Australia, 8.1 per cent in New South Wales, and 2.7 per cent in South Australia. Detached house sales fell by 1.8 per cent in Queensland.
That sales growth was broad based and largely in houses is two other good signs:
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It seems for now at least the falls in consumer confidence are being outweighed by the big fiscal and monetary stimulus. We’re not yet above where we we’re when the rate cuts started but maybe next month!
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
