New home sales continued their modest move upwards in May 2013, new data has revealed.
According to the latest Housing Industry Association (HIA) New Home Sales report, total seasonally adjusted new home sales increased by 1.6 per cent in May 2013, taking monthly sales back to their highest level in 18 months.
Detached house sales posted modest growth of 0.9 per cent, thanks to gains seen in three out of five mainland states – New South Wales, Victoria and South Australia. Multi-unit sales enjoyed a faster monthly growth pace of 5.7 per cent.
“It is pleasing to observe upward momentum in new home sales continuing, especially given the low depths plumbed in 2012,” HIA chief economist Harley Dale said.
“A range of housing indicators, including new home sales, suggests Australia experienced modest growth in new residential construction in 2012/2013, with some momentum in activity set to carry into the fresh financial year.
“That outcome was important, following as it did a sustained period of weakness that saw activity in a majority of markets reach historically very low levels.
“The key is whether a new home building recovery can be sustained, and at a growth rate sufficient to meaningfully assist the Australian economy with its rebalancing acts,” Mr Dale noted. “We won’t get that required outcome while policymakers continue to assume that super-low mortgage rates will do the job all on their own.”
Mr Dale said there needs to be a concerted focus on policy action, led at federal level, to deliver sustainably higher levels of new housing supply.