The latest result for the HIA New Home Sales Report, a survey of Australia’s largest volume builders, represents a new high for the cycle. Total seasonally adjusted new home sales increased by 1.1 per cent in February following a gain of 1.8 per cent in January, and the volume of sales is now just above the previous peak of April 2014. The February new home sales result reflected a jump of 11.1 per cent in ‘multi-unit’ sales, while detached house sales fell by 1.3 per cent.
Detached house sales are easing in New South Wales and Western Australia, previously key drivers of growth, and have fallen significantly in South Australia. The modest growth in new house sales in Queensland and Victoria is not enough to
offset these declines. In February 2015 detached house sales increased by 1.5 per cent in Victoria and by 0.2 per cent in Queensland. Detached house sales declined by 4.8 per cent in New South Wales, 2.0 per cent in South Australia and 2.9 per cent in Western Australia. The level of sales in the three months to February 2015 compared with the previous three months was lower in NSW (-6.9 per cent), SA (-2.8 per cent) and WA (-1.3 per cent). Elsewhere sales increased; by 3.8 per cent in Victoria and by 9.0 per cent in Queensland.
DFA comments that the rotation towards units is being driven by high prices, and the significant growth in investment purchases. We recently featured the results from our surveys which helps to explain how things are playing out.
