New home sales have started to move after a two-year break and have started to rise again, according to Housing Industry of Australia. The newest HIA New Home Sales report shows a 2.8 percent rise in sales of detached private homes across Australia in the three months up to November 2019.
Comfortable credit rules and interest rate cuts marked the start of the increase which was then boosted by income tax cuts and the promise of the first home loan deposit guarantees from the Federal Government. Compared to a year ago, sales were still down by 5.7 percent.
Financial requirements remain difficult although there are areas where investment property loans are increased. The resurgence of property prices in key markets in Sydney and Melbourne has seen confidence in the return on the housing market.
The recovery of the market up to now has been largely reserved for owner-occupiers, with first home buyers. It remains to be seen when and to what extent investors return to the market.
The biggest rise was in Western Australia where a 14.4% uplift was recorded, followed by Queensland with an increase of 2.0% and Victoria (up 1.6%). Detached house sales in New South Wales and South Australia declined over this period, by 0.5% and 2.5%, respectively.
“After a rough couple of years, demand for new houses is finally rising in Western Australia,” said HIA economist Diwa Hopkins. Population growth is the strongest it’s been since 2015, she says.