New home sales have lifted in August, according to the Housing Industry Association’s New Home Sales Report.
Diwa Hopkins, economist at HIA says the increase in August is good news after a weak July result, however there are still signs of a downward trend.
“While an overall downward trend in total seasonally adjusted new home sales is still apparent, the increase of 3.3% in August 2014 means that this decline is quite modest,” she said.
“Despite the August bounce, we still hold the view that new home sales reached their peak for the cycle back in April this year.”
Hopkins says this is because the August result was primarily driven by multi-unit sales, which can often be “volatile”. This sector increased by 19.8%, while detached house sales saw a much slighter increase of 0.5%.
Statistics released by the Australian Bureau of Statistics last week saw residential building approvals increase in August. According to the data, in the twelve months to August approvals reached 197,571 – a record high in any twelve month period. Although, this too was driven by the volatile multi-unit sector.
Despite signs that the market may not be completely on the road to recovery, Hopkins says it is important to note that we are still getting some encouraging news.
“It is important for the new home building sector and the broader domestic economy that we continue to see evidence of historically high levels of building approvals and new home sales throughout 2014 and into next year, even if the peak for these indicators has passed,” she said.
