New home sales bounced back in September to return to levels seen during the latter half of 2018, according to a newly released survey.
The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – showed sales increased for the second consecutive month by 5.7 per cent. Despite these lifts, they remain down by 1.5 per cent compared to the June 2019 quarter.
HIA Economist Angela Lillicrap said the report is a leading indicator of future trends in the residential building industry and it showed confidence was returning to the housing market.
“This improvement in sales is a welcome reprieve from the steady decline that emerged in late 2018,” Ms Lillicrap said.
“It remains too soon to confirm that we have passed the bottom of the cycle, but this result does highlight that we are not likely to see further material falls in new home sales.”
She cited the easing of APRA’s lending restrictions and the RBA’s rate cuts as having a positive impact on the new home market.
“With the addition of the Government’s First Home Loan Deposit scheme likely to see an additional increase in first home buyer activity, we expect that the improvement in new home sales will be sustained,” Ms Lillicrap said.
Across the country, new home sales increased for the month in all the states except for New South Wales which declined by 12.1 per cent to be flat (-0.3 per cent) for the quarter.
Victoria increased by 11.0 per cent, Queensland by 1.7 per cent, South Australia by 18.0 per cent and Western Australia increased by 13.6 per cent during September.
These gains were not enough to offset earlier weak results with Queensland being the only state to experience a significant increase (+6.9 per cent) compared to the previous June quarter.
Victoria declined by 4.7 per cent and South Australia by 5.4 per cent. New South Wales and Western Australia were relatively steady compared to the previous quarter, down by 0.3 and 1.0 per cent respectively.
