The report, a survey of Australia’s largest volume builders, shows that sales of multi units drove the monthly result, up by 15.9% while new detached house sales fell by 1% in June. However detached sales were up by 2.6% in the second quarter.
‘That is a healthy note on which to finish the fiscal year. Further, albeit modest growth in detached house sales last quarter, together with very elevated multi-unit sales, augers well for new residential construction in addition to wider elements of the domestic economy,’ said HIA chief economist Harley Dale.
He also pointed out that detached house sales increased in four out of five mainland states in the June quarter. ‘The new home building sector will provide a healthy contribution to broader economic growth in 2014/2015,’ he said.
‘As the recovery enters its third year, the magnitude and duration of the current new home building upcycle is less certain than would usually be the case at this juncture. The share of medium/high density construction is higher and there are considerable delays occurring in the availability of titled land for detached and semi-detached housing,’ he added.
A breakdown of the figures show that in June private detached house sales fell in two out of five mainland states. There was a decline of 3.2% in New South Wales and 4.2% in Victoria. Detached house sales increased by 1.8% in Queensland, by 1.3% in South Australia, and 2.2% in Western Australia.
In the June 2014 quarter, detached house sales increased by 0.4% in New South Wales, by 4.1% in Victoria, by 6.6% in Queensland and by 4.1% in Western Australia. Detached house sales fell by 8.4% in South Australia in the June quarter and Dale said that the state may be the most vulnerable new home building market in the second half of 2014.
Meanwhile, in another positive sign for the residential construction sector, the latest housing finance data from the Australian Bureau of Statistics show that new home lending grew in the final quarter of the 2013/2014 fiscal year.
Diwa Hopkins, HIA economist, pointed out that the owner occupier segment of new home lending performed well throughout the year. ‘Following decent increases in the December and March quarters, lending for the purchase or construction of new homes increased again during the June 2014 quarter, albeit at a more modest pace of 1%,’ said Hopkins.
Over the full 2013/2014 fiscal year new home lending increased by 12%. ‘With lending rates remaining very low, turnover in the established home market has risen, as have home prices. The residential construction industry has responded strongly to these signals,’ explained Hopkins.
‘In terms of new home lending being a leading indicator of residential building, the housing finance figures suggest home building activity should continue its strong recovery as we progress through the second half of the year. There are already signs that the improved supply of dwellings may have taken some of the heat out of price growth, with dwelling price growth decelerating in 2014,’ added Hopkins.
The seasonally adjusted number of loans for construction increased by 1.1% in the month of June 2014 and was up by 0.7% over the June quarter while loans for the purchase of a new dwelling increased by 4.6% in June, and increased 1.6% over the quarter.
Over the three months to June 2014 HIA’s seasonally adjusted estimate shows an increase in the number of loans for new housing of 2% in New South Wales. 0.3% in Victoria, 11.3% in Queensland, 9.1% in Western Australia and 13.4% in Tasmania. There was a 0.8% fall in South Australia.
