New home sales increasing: HIA

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

The Housing Industry Association's quarterly analysis of new housing sales showed a 4.2 per cent rise in 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 by 0.6 per cent in December to record 3.6 per cent growth for the December quarter.

But the HIA's figures illustrated there is a long way to go for Perth's homebuilding market, with detached house approvals down 7.3 per cent in the three months to November 2010.

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

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