New home sales bounce back

Sales of new homes in Australia climbed more than seven per cent in February marking a comeback in the housing industry after a sluggish five months, a new report has found.

The Housing Industry Association (HIA) report showed sales of new homes in Australian mainland states rose by 7.6 per cent to 8,644 dwellings - the first increase since October.

Sales of multi-unit dwellings or apartments led the charge, jumping 9.8 per cent, while detached house sales were up by 7.4 per cent.

But Australia's peak housing industry body said that despite the encouraging result there was no sign of a sustained recovery in the market just yet.

"It was a disappointing start to 2006 so recovery in sales across the board in February certainly provides a more positive sign for the new housing industry," HIA chief economist Harley Dale said.

"We have yet to see any kind of sustained recovery in lead indicators for new housing.

"We would hope that evidence of such a recovery will build over the course of this year."

The HIA report, with surveys the largest 100 residential builders in Australia, found Queensland had the strongest growth in detached house sales, advancing 15 per cent.

It was followed by Western Australia, where sales firmed 12 per cent.

But sales of houses in Victoria rose only two per cent, while New South Wales sales edged up five per cent.

"House sales in New South Wales lifted once more, but the level remains very low as Sydney continues to buckle under excessive housing affordability constraints," Mr Dale said.

Sales of houses in South Australia grew nine per cent.

14th April 2006

Source: SMH