01/06/2009 - 11:57

WA bucks rising new home sales trend

01/06/2009 - 11:57

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Western Australia has bucked the national trend in new home sales with deals down 4 per cent in April while the national figure rose to a 14-month high, new data from a home building industry group shows.

Western Australia has bucked the national trend in new home sales with deals down 4 per cent in April while the national figure rose to a 14-month high, new data from a home building industry group shows.

The Housing Industry Association survey found new home sales across Australia rose by 0.5 per cent to 8,191 homes, the highest since February, 2008, after a 3.1 per cent rise in March.

"The combination of low interest rates and the first home boost have lifted prospects for the housing industry, which is expected to convert to a recovery in home building activity from the June quarter of 2009," HIA chief economist Harley Dale said in a statement.

"The leading indicators point to housing as an emerging bright spot in the economy."

The HIA forecasts that new home starts will increase by 6,900, or eleven per cent, in the second half of 2009.

Australian building approvals rose by 3.5 per cent to 10,494 units in March, seasonally adjusted, the Australian Bureau of Statistics (ABS) said last month.

The ABS will release April's building approvals report on Tuesday.

Sales of detached homes drove the overall sales increase in April, while apartment sales remained subdued.

Purchases of detached homes rose by 1.1 per cent to 7,496 houses in April, HIA said in a statement. That was driven by the disproportionate stimulus to project home builders from the Federal Government, HIA said.

In mid-October, the federal government doubled the first home buyers grant to $14,000 for established dwellings and tripled it to $21,000 for newly built homes.

The Reserve Bank of Australia (RBA) has lowered the cash rate by four percentage points to 3.25 per cent between September and February.

Subsequently, the RBA cut official interest rates on April 7 by 25 basis points to three per cent, a 49-year low.

Sales of flats fell by 5.6 per cent to 695 units, as investors continued to be reluctant to commit in an environment where it's difficult to secure credit.

In individual states, new home sales rose by 4.5 per cent in NSW during April, with Victoria up 1.5 per cent and Queensland 2.9 per cent higher.

South Australia was the only other state to experience a decline with a 4.8 per cent fall.

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