Sales soar as new homes buck oz construction trend
Photo credit: Kev Whelan
Sales of new homes have reached a four-year high, as house building proves a bright spot in Australia's gloomy construction sector.
After signs of a mild recovery in March, the national construction industry slipped back into negative territory in April, according to the Australian Industry Group and Housing Industry Association Australian Performance of Construction Index. The index dipped by 3.1 points to 47, as industry activity dragged down the sector.
House building, though, expanded for a second month, albeit at a slower rate than in March 2015.
Activity in the apartment building sector turned negative for the first time in three months, but the positive figures for home construction "underlines the importance of residential construction in fuelling domestic demand more broadly," says HIA Senior Economist, Shane Garrett.
A survey of Australia's largest builders also found that new home sales have reached their highest level since early 2010.
"Today’s results show total seasonally adjusted new home sales increased by 4.4 per cent in the month of March," says HIA Economist Diwa Hopkins.
The March result for total new home sales marks an 11.3 per cent rise in multi-unit sales and a 2.6 per cent rise in detached house sales.
"The monthly rise in both the detached and multi-unit segments of the market is an encouraging resul," adds Hopkins. "However, the broader trend is that growth over the past year has been driven by multi-unit sales, while detached house sales have tracked sideways."
Private detached house sales increased by 5.9 per cent in Victoria, 4.2 per cent in New South Wales and also 4.2 per cent in Western Australia. Private detached house sales declined by 5.8 per cent in South Australia and by 2.3 per cent in Queensland.
The recent interest rate cut to a new all-time low of 2 per cent means prospects for new home building "look bright for the short-term", adds Garrett, and "will continue to offer badly-needed support to Australia’s economy".