The Housing Industry Association , the voice of Australia’s residential building industry reports that new home sales posted a fourth consecutive gain in April 2014, providing an important positive signal for broader economic activity.
Private sector new home sales enjoyed a monthly gain of 2.9 per cent to be up by 6.0 per cent over the three months to April this year. Multi-unit sales increased by 9.3 per cent in April while detached house sales posted a 1.8 per cent rise, which marked the sixth consecutive increase for this component.
HIA Chief Economist, Dr Harley Dale observes that the recovery in new home building is a key plank in Australia’s economic growth, as evidenced by the March quarter construction work done figures. He noted that momentum in new home building activity will carry over into the June quarter, while the trajectory evident in coming months for leading indicators such as new home sales and building approvals will provide crucial insight to the growth prospects for the broader economy in 2014/15.
According to Harley Dale, apart from the magnitude of a new home building recovery, the breath and duration of that recovery are also important. He commented that market forces are to date largely overcoming the excessive tax and regulatory environment in which the sector operates, while the structural shortage of skilled labour has yet to fully rear its head in the cycle.
In April 2014 seasonally adjusted detached house sales increased by 6.4 per cent in Western Australia, 5.2 per cent in New South Wales, and 0.5 per cent in Victoria. Detached house sales fell by 2.1 per cent in Queensland and 6.0 per cent in South Australia.