Australia’s new-home sales at five-year high

on May 7, 2015
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Australia’s new-homes sector has seen strong growth in March, with real estate investment activity at its highest level since early 2010, a new survey by the country’s Housing Industry Association (HIA) has revealed.

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According to the data, overall new-home sales rose 4.4 percent in March from February. Sales of multi-units, or apartments, improved by 11.3 percent, while detached home sales advanced 2.6 percent month-on-month.
Sales of new detached homes increase by 5.9 percent in Victoria, 4.2 percent in New South Wales and by 4.2 percent in Western Australia during March. Sales fell by 5.8 percent in South Australia and by 2.3 percent in Queensland. The consensus view amongst analysts is that the extent of regional disparity is likely to remain unchanged for the foreseeable future.
HIA economist Diwa Hopkins commented on the findings: “The monthly rise in both the detached and multi-unit segments of the market is an encouraging result. 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.” She added that lower lending rates would provide added support to residential construction activity. The Reserve Bank of Australia (RBA) trimmed its cash rate to a record low of two percent on Tuesday, which was quickly followed by cuts to mortgage rates by the major banks.
HIA’ latest report further showed that the renovations sector of Australia’s property market was struggling. Over the past three years the volume of renovation activity has fallen by 15 percent. In the year to date, activity in this area has eased 2.8 percent. However, investment in the sector is expected to pick up by 8.2 percent between 2015 and 2018, as a result of low interest rates and the gradual recovery of economic activity, HIA has forecast.

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