Some better news this morning with HIA New Home Sales for June are out and the steady recovery continues and has reversed the last two years of trough:
New home sales continue to indicate the changing composition of new home building in 2013, said the Housing Industry Association, the voice of Australia’s residential building industry.
“Detached housing has gained momentum as non-detached housing, primarily mid/high density product, has lost momentum over 2013 to date,” said HIA Chief Economist, Dr Harley Dale. “The leading home building indicators of both new home sales and building approvals are highlighting this trend.”
The HIA New Home Sales report, a survey of Australia’s largest volume builders, showed that total seasonally adjusted new home sales increased by 3.4 per cent in June 2013, representing a fourth consecutive rise. Detached house sales increased by 7.3 per cent at the end of last financial year, but multi-unit sales dropped by 17.5 per cent.
“Last financial year was a tale of two halves for new home sales. The first stanza was dominated by detached house sales up against stronger multi-unit sales, the latter marked by an improving detached house segment occurring as the multi-unit market lost momentum,” said Harley Dale. “The overall result was that new home sales fell by 4.3 per cent in 2012/13 when compared to the 2011/12 financial year.”
“Given it was a weaker year overall for new home sales it has been very encouraging to observe upward momentum build as we moved through 2012/13,” noted Harley Dale. “There is still a long way to go. New home sales volumes are 27 per cent down on their long term average. A range of leading indicators beyond just new home sales are yet to provide evidence of Australia approaching the healthy and geographically broad-based new home building levels required by our growing population and transitioning economy.”
In the month of June 2013 detached house sales increased by 19.7 per cent in Victoria, 7.1 per cent in Western Australia, 3.9 per cent in New South Wales, and 0.5 per cent in South Australia. Detached house sales fell by 11.0 per cent in Queensland.
The Victorian result is very weird. The FHOG incentives for new homes don’t kick in until July so I’m at a loss to explain this surge. Perhaps developers discounted in advance of the grant to pull forward demand?
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.
