New home sales drop but still strong: HIA

Victorian new home sales dropped by 9 per cent in May, following months of increased sales resulting from the boosted first home buyer grants.

The market is still performing impressively, with detached sales increasing by 16pc over the three months to May 2009, according to the Housing Industry Association’s survey of the state’s largest builders.

“Along with other leading indicators, the figures point to a healthy new home building market in Victoria in 2009,” HIA Victorian Executive Director Gil King added.

“An existing new home affordability advantage, compared with Australia’s other large states, has been bolstered by the Victorian Government’s further stimulus to first home buyers entering the new housing market,” according to the executive.

From July 1 the combined federal and state grants will be $32,000 for new homes in metropolitan Melbourne and $36,500 for ones in the regions.

“We believe the more generous grants will result in ongoing activity in the first home buyer market, particularly between July 1 and September 30 when the combined grants are highest.”

The number of private sector detached house approvals increased by 7.3pc according to the survey, the fifth consecutive rise.

Nationally, new home sales decreased 5.7pc in May but were still 15pcover the December low point.

In May, detached new home sales decreased 9.9pc in New South Wales and 13.5pc in Western Australia.

Sales rose 2pc in Queensland and 3.6pc in South Australia.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.

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