10/02/2011 - 00:00

New home sales bounce

10/02/2011 - 00:00

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Western Australia’s housing construction market is seemingly emerging from its three-year trough, with industry figures showing new home sales increased for a third consecutive month in December.

New home sales bounce

Western Australia’s housing construction market is seemingly emerging from its three-year trough, with industry figures showing new home sales increased for a third consecutive month in December.

The Housing Industry Association’s quarterly analysis of new housing sales, based on a survey of Australia’s 100 largest builders, showed a 4.2 per cent rise in new home sales WA in December, adding to a 6.7 per cent gain over the December quarter.

“While new home sales are still well down in the context of the last three years, the desperately needed turning point has emerged and there now appears to be an upward momentum materialising,” the HIA’s report said.

“This upward momentum will need to be sustained given the backdrop of escalating resources sector activity that is certain to keep upward pressure on population growth.”

Nationally, new home sales eased 0.6 per cent in December to record 3.6 per cent growth for the December quarter, dragged down by multi-unit sales, which fell 7.4 per cent.

The HIA said that while sales nationally did improve in the December quarter, the result was due to a strong October but momentum had slipped.

“The Reserve Bank’s increase in the cash rate in November and the subsequent independent moves from the trading banks, weighed down new home building conditions,” the HIA said.

“Structural supply-side obstacles continue to plague residential development and fan the flames of the affordability crisis.

“An inadequate pace of land release, inefficiency in planning processes, inequitable taxation of new housing, and an ongoing credit crunch are detracting from building activity

“The trajectory of interest rates and rate expectations in 2011 will be the number one driver of new home sales activity this year.”

The HIA’s figures illustrated that, despite the positive growth in the December quarter, there was a long road to recovery for Perth’s home-building market, with detached house approvals down 7.3 per cent in the three months to November.

The HIA has forecast a drop of 20 per cent in new housing starts for WA in 2011, the sharpest decline across the nation.

In November last year, there were 1,399 new dwellings approved, down significantly from the 1,583 approved in November 2009, the HIA’s statistics showed.

Nationally, the HIA said new housing starts would decrease 9 per cent over 2011.

“The policy backdrop unfortunately continues to tilt away from support for new home building,” the HIA said.

“The Federal Government’s segmentation of the housing portfolio and recent announcements such as the capping of the NRAS program signal unfavourable policy directions in terms of boosting new housing.”

 

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