New homes sales in Australia up by over 3% in January, led by detached properties

New home sales in Australia increased by 3.1% in January with detached properties leading the growth, according to the latest report from the Housing Industry Association.

Detached house sales were up by 5.8% while the sale of multi-units dropped by the same amount but there was quite considerable regional variation.

Detached house sales increased by 7.9% in Queensland, by 7.3% in Western Australia, by 5.5% in Victoria, by 4.2% in New South Wales, and by 1.3% in South Australia.

Meanwhile, the latest data from the Australia Bureau of Statistics shows the number of homes approved fell by 1% in January, continuing a 10 month decline.

Approvals decreased in January in the Australian Capital Territory by 11.3%, in the Northern Territory by 9.5%, in New South Wales by 3.5%, in Western Australia by 1.8% and in Tasmania by 1.7%. But they increased by 1.3% in Victoria, by 0.3% in South Australia and by 0.1% in Queensland.

Also in trend terms, approvals for private sector houses rose 0.1% in January, while approvals for private sector dwellings excluding houses fell 2.3%.

The value of total buildings approved fell 1.8% in January, in trend terms, and has fallen for seven months. The value of residential building fell 2% while non-residential building fell 1.3%.

According to HIA chief economist Harley Dale once the current pipeline is exhausted, new home construction activity will soften. ‘This year will be another healthy one for detached house and multi-unit construction, but we won’t surpass the heights of 2015,’ he said.

‘The new home building sector is crucial to Australia’s economic prospects in 2016 and should continue as a mainstay of domestic economic activity. That is provided policy considerations and debates underway now don’t have adverse consequences for confidence towards housing,’ he added.