New home sales in Australia reach new peak
Total seasonally adjusted new home sales increased by 1.1% in Australia in February following a gain of 1.8% in January, according to the latest data.
It means that sales volumes are now just above the previous peak of April 2014 and a breakdown of the figures show that apartments are selling more than detached homes with flat sales up 11.1% and houses down 1.3%.
But there are considerable regional variations. Detached house sales are easing in New South Wales and Western Australia, previously key drivers of growth, and have fallen significantly in South Australia.
According to Harley Dale, chief economist of the Housing Industry Association (HIA), the modest growth in new house sales in Queensland and Victoria is not enough to offset these declines.
The data shows that in February detached house sales increased by 1.5% in Victoria and by 0.2% in Queensland. Detached house sales fell 4.8% in New South Wales, 2% in South Australia and 2.9% in Western Australia.
The level of sales in the three months to February 2015 compared with the previous three months was down 6.9% in New South Wales, down 2.8% in South Australia, and down 1.3% in Western Australia. Sales increased by 3.8% in Victoria and by 9% in Queensland.
‘This is another very strong result for Australia’s national new home building sector. In January, new dwelling approvals reached their highest level on record and now in February that activity remains at exceptionally high levels, with a solid pipeline of activity set to remain in play over the coming months,’ said HIA senior economist, Shane Garrett.
Data also shows that new home approvals in February were 3.2% lower than the previous month but still recorded their second highest level since figures began 32 years ago.
Detached house approvals inched up by 0.2% while there was a 6.6% fall in multi-unit approvals and according to Garrett at a time of weak overall domestic demand, new residential construction is acting as a welcome pillar of support.
‘A steady pipeline of new homes represents the most effective solution to alleviating housing affordability pressures. Governments at all levels must work to ensure supply constraints do not impede the continuation of elevated levels of new home construction,’ he explained.
A breakdown of the figures shows that new home approvals increased most strongly in Victoria with a rise of 20.5%, followed by New South Wales up 13.5%, and Tasmania up 4%.
But they fell by 8% in Western Australia, were down by 30.6% in Queensland and by 41.4% in South Australia. Garrett said that action to turn around new home building conditions in South Australia are urgently required.
New home approvals declined in trend terms in both the Northern Territory with a fall of 2.7% and the Australian Capital Territory with a decline of 16.2%.