New home sales are up but units continue to suffer

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March saw a slight lift in the nationwide number of new home sales, according to the latest HIA - JELD-WEN New Home Sales Report.

The report, which surveyed Australia’s major residential builders, saw a 4.3% increase in the number of new homes sold in March.

Multi-unit sales however fell by 10%, following a 7.6% drop in February, meaning that the overall increase in new home sales was thanks largely to a 5.8% increase in the number of detached house sales.

Detached house sales saw rises of 13.5% in New South Wales, 11.1% in Queensland, 3.6% in Victoria and 3.1% in Western Australia, but a drop of 6.4% in South Australia.

HIA chief economist Harvey Dale noted that the welcome rise in new home sales reflected an ongoing pause in interest rate hikes and some abatement of 2011’s serious weather conditions, but warned that “a sustained period of improvement is required for new home sales and a raft of other leading indicators before we can look ahead to healthy levels of residential building activity.”

“On-going interest rate stability in 2011 and renewed commitment from the Federal Government in next week’s Budget to tackling the inequitably high cost of new housing would certainly be helpful,” he added, concluding that current soft housing conditions and less pressure on trades means that now is a good time to build a new home.

Is now a good time to build? Should investors steer clear of new units? Join the debate in the YIP forum at

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