The first month of 2014 was a positive one for new homes sales with an increase of 0.5 per cent recorded in January, said the Housing Industry Association, the voice of Australia’s residential building industry.
“Following their small decline in December, New Home Sales resumed their growth trajectory during January,” said HIA Senior Economist, Shane Garrett. “The volume of new home sales rose by 0.5 per cent during the month. In January, sales of new detached houses rose by 0.3 per cent, with multi-unit sales increasing by 1.6 per cent,” added Shane Garrett.
“New home sales have been rising pretty steadily since the third quarter of 2012, encouraged by the falling interest rates and the return of confidence to the housing market,” explained Shane Garrett. “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,” Shane Garrett added.
Compared with the same month last year, new home sales were up by 17 per cent. The three months to January saw an annual increase of 22.3 per cent compared with the same quarter twelve months earlier.
“Strengthening new home sales activity suggests that higher dwelling construction activity during early 2014,” said Shane Garrett. “The HIA recently published its series of Outlook reports*, which revised its forecasts for new home commencements upwards for 2014. This year, we expect about 165,600 commencements, followed by 168,000 starts in 2015,” added Shane Garrett. “Accordingly, we should continue to see stronger sales activity in the coming years,” Shane Garrett noted.
“It is important to bear in mind that the new home sales recovery has not benefitted all states,” cautioned Shane Garrett. “State governments will be framing their budgets in the coming months, and it is vital that their policies work to sustain the housing market recovery,” concluded Shane Garrett.
In the month of January 2014 new private detached house sales increased by 10.9 per cent in Victoria and by 0.4 per cent in Queensland. New detached house sales declined by 6.9 per cent in South Australia, fell by 6.4 per cent in New South Wales and declined by 1.9 per cent in Western Australia.
During the three months ended January 2014, new detached house sales increased in South Australia (+50.4 per cent), Queensland (+17.8 per cent) and New South Wales (+6.2 per cent). New detached house sales declined in Western Australia (-1.1 per cent) and in Victoria (-12.3 per cent) over the same three month period.
Hmm, I’m not sure I’d say that sales are resuming a “growth trajectory” month on month given figures are down from November. The year on year figure is still good, though!
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.
