Units drive increase in new home sales

The HIA-ACI New Home Sales Report revealed that total seasonally adjusted new home sales finished last year strongly, recording a six per cent increase in December.

Harley Dale, chief economist at the Housing Industry Association (HIA) said the headline monthly rise in December 2015 was driven by both the detached house and “multi-unit” segments of the market.

“Private detached house sales increased by 2.2 per cent, while multi-unit sales jumped by 21.1 per cent,” Mr Dale said.

“Key leading indicators of new home building such as HIA-ACI New Home Sales [Report] and ABS building approvals and new housing finance are consistent with very healthy national construction volumes persisting throughout the first half of 2016.

“These indicators are also signalling a continuation in 2016 of very large differences in new housing conditions across the states.

“The updates we receive for leading indicators in coming months will be closely watched to determine the magnitude of any risk that the second half of 2016 is materially weaker for new home building than the first half of the year.”

In December 2015, detached house sales increased in three of the five mainland states: Queensland (+5.2 per cent), Western Australia (+5.0 per cent) and Victoria (+1.1 per cent). Sales declined in South Australia (-2.1 per cent) and New South Wales (-0.1 per cent).

During the December 2015 quarter, detached house sales increased in Queensland (+4.3 per cent) and New South Wales (+0.3 per cent). Sales declined in Western Australia (-15.4 per cent), South Australia (-10.2 per cent) and Victoria (-4.0 per cent).

[Related: CBA forecasts 'volatile year' for Australian real estate]