New home sales in Victoria pushed up the national sales figures by more than 6 per cent in April, according to the Housing Industry Association (HIA).

Releasing its latest New Home Sales report of Australia’s major residential builders, the HIA says new home building in Victoria had defied higher interest rates thanks to the Victorian Government’s first home buyer top-up grant for new dwellings.

HIA chief economist, Dr Harley Dale, says Victoria has the stand-out new home building market due to more favourable affordability conditions for new dwellings.

"The strong response by first home buyers to the new home grant underlines how effective the Victorian stimulus has been in lifting residential building activity. However, there are some warning signs, with buoyant demand eating into the availability of serviced land," Dale says.

"Without Victoria, detached house sales at the national level would have been lower in April. Interest rates are blunting new home sales activity.

"There is increasing evidence that higher interest rates have started to take a significant bite out of housing demand over the last two months."

Private sector detached house sales increased by 6 per cent in April. Multi-unit sales increased by 8 per cent following two soft months in February and March.

Over the three months to April 2010, new detached house sales were up in VIC (+19 per cent) and SA (+1 per cent), but were down in NSW (-6 per cent), QLD (-4 per cent) and WA (-2 per cent).

In the month of April 2010, detached new home sales increased by 27.6 per cent in VIC and by 4.3 per cent in SA.

Detached house sales fell by 9.6 per cent in NSW, 4.5 per cent in QLD and 8.2 per cent in WA.