New home sales increased 3% in October, following a flat result in September, according to The Housing Industry Association’s New Home Sales Report.
Harley Dale, chief economist at HIA said the result was a narrowly driven one which reflected growth in detached house sales in Victoria and Western Australia, although it is still a welcomed result.
“After a relatively sharp decline of 5.7% in July, driven by both detached houses and multi-units, total new home sales have mounted a modest recovery.
“Sales are still off their cyclical peak reached back in April this year, but the overall volume of new home sales is still at an elevated level. That augurs well for healthy new home construction activity persisting into 2015.”
During October, detached house sales increased by 4.7% in Victoria and by 24.8% in Western Australia. Detached house sales fell by 3% in New South Wales and were down by 7.8% in Queensland and 1.7% in South Australia.
However, as 2014 comes to a close, Dale is looking towards 2015 and says Australia may be on track to commence a record number of homes.
“We now want to be seeing evidence pointing to a healthy prognosis for new home building activity in 2015. In this regard we have positive signals coming from three key leading indicators. HIA new home sales and ABS building approvals are past their peaks but remain at elevated levels. Lending for new housing is still trending higher and doesn’t appear to have peaked yet.”