New home sales rise by 21% in April

New home sales in Western Australia rose by 21.8 per cent in April, while the national figures were flat, recording a slight increase of 0.1 per cent, figures from the Housing Industry Association Ltd showed.

HIA's New Home Sales figures released today for the month of April showed that while Western Australia recorded a 21.8% increase in April, following a 4% increase in March, these increases were off a very low base recorded earlier in the year, and signal the exceptional land and house packages becoming available throughout WA.

HIA WA Executive Director, John Dastlik said, "while the 3 months to April saw a reduction of 11% on the previous 3 months, some signs of arresting the long term decline over the past 18 months are becoming evident with a stabilizing in new home sales."

"The new home building sector was hit extremely hard in the March 2008 quarter as higher interest rate, fuel, and food bills made a further sizeable dent in housing affordability.

"The subsequent flat outcome for new home sales throughout Australia in April provides the first evidence that these negative forces will remain in play throughout the June quarter as well," Mr Dastlik said.

The impending 2008/09 financial year will be a flat year at best for new residential construction, without contemplating further interest rate hikes.

The recent legislation for First Home Super Saver Accounts and the technical paper on the National Affordable Rental Scheme are examples of the forward looking approach to addressing the acute shortage of housing stock.

In the short term, however, it is increasingly difficult to see how a narrowing of that shortfall is going to occur.

HIA's New Home Sales Survey is compiled from a sample of the largest 100 residential builders in Australia.