Finance Property New home sales surge

New home sales surge

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Industry figures show new home sales hit a two-and-a-half year high in November, with units leading the charge.

The Housing Industry Association survey of the largest residential developers shows sales rose 7.5 per cent in November 2013, with multi-unit dwellings up 30.5 per cent and detached homes rising 3.6 per cent.

That took new home sales to the highest levels seen since a first home buyer induced boom in the early part of 2011, although separate figures show the current rise has been driven more by investors than first time purchasers.

The level of sales is now more closely reflecting the elevated number of building approvals that have been seen in Bureau of Statistics figures over recent months.

The HIA’s chief economist Harley Dale says that is a good sign for residential construction, one of the economy’s largest employers.

“The upward momentum evident in new home sales since the closing stages of 2012 continued late last year – that is a good sign for residential construction activity in 2014,” he noted in the report.

“Over the three months to November 2013 the volume of detached house sales increased in all five surveyed states, while the downward trend evident in multi-unit sales has now reversed due to strong monthly outcomes in both September and November of last year.”

Over the past three months South Australia has recorded the largest growth in detached house sales (+26.8 per cent), with Queensland also recording strong growth (8.7 per cent).

Victoria and Western Australia both had growth above 2 per cent, but New South Wales only had a 0.1 per cent rise in new house sales.

However, ABS figures show that non-house building approvals (such as units) have outnumbered detached house approvals in New South Wales every month since February 2012, and show strong growth in applications for multi-unit developments reflecting a shift in Sydney from standalone houses to apartments as the dominant form of new residential development.