New home sales build hope for housing sector
SALES of new homes increased in December for the third month in a row, building on hopes of a modest recovery in Australia's housing sector.
The positive result follows hard on the heels of recent data showing house prices across Australia rose 2.1 per in 2012, reversing much of the steep declines seen the year before.
Fairfax-owned Australian Property Monitors released figures on Thursday showing solid growth in the December quarter of 1.9 per cent drove a rebound at the end of the year.
Some of those gains were spurred by new home sales in December which rose a seasonally-adjusted 6.2 per cent, the latest Housing Industry Association data shows.
Over the December quarter sales were up by 3.3 per cent, the HIA said.
"The promising headline rise last December was driven by both detached house and multi-unit sales," HIA economist Geordan Murray said.
Compared with 2011, detached house sales were weak through much of 2012, down by 22.7 per cent over the year, Mr Murray said.
But while initially underperforming, in December they bounced back.
In the last three months of the year detached house sales were up in New South Wales (+14.4 per cent), South Australia (+9.3 per cent) and Western Australia (+2.5 per cent).
They fell, however, in Victoria (-8.4 per cent) and Queensland (-5.5 per cent).
Multi-units sales outperformed in 2012, recovering from record low levels the year before to rise 24.1 per cent over the year, the HIA said.
The better outlook has prompted property professionals to predict mild house price gains over the next two years, according the NAB's quarterly residential property survey.
Expectations for capital gains were highest in Western Australia and weakest in South Australia and the Northern Territory, the survey reveals.
Owner occupiers were the biggest players in the new property market, the survey suggests.
First home buyers were also more active, especially in WA. Overseas buyers were active, with Chinese buyers reportedly the fastest growing segment, NAB said.
In line with the HIA's assessment, demand for new property improved, but property insiders assessed the gains as"fair" only, according to the NAB's quarterly property survey.
"Survey respondents cited tight credit conditions as the most "significant" constraint for new housing development," the survey said.
Concerns over housing affordability are falling slowly as interest rates fall but are still "significant", it said.