February 2, 2010The number of new home sales fell by 4.6 percent nation-wide in December, as interest rates rose and the First Home Owner Boost continued to be scaled-back.
According to the latest
Housing Industry Association (HIA) survey of Australia’s largest builders, detached home sales fell by 6.2 percent in December 2009, yet rose 2.4 percent in Queensland.
HIA’s Chief Economist Harley Dale says while a lift in new home sales in calendar year 2009 signalled a first round recovery in residential construction, there remains a big question mark over whether such a recovery could be sustained beyond 2010.
“New detached home sales increased by 7 percent in 2009 with that recovery driven in large part by first time buyer-related activity. After seven years of trend decline we will finally see an increase in housing starts in 2010,” Dale says.
“It is clear that momentum is coming out of new home sales as the stimulus from first time buyer- related activity recedes. We don’t as yet, however, have evidence of trade-up buyer and investor activity gathering sufficient momentum to propel us into the second round of a new home building up cycle,” he says.
This evidence is going to be harder to come by as interest rates move higher, according to Dale.
“Without a broad based recovery in private sector new residential construction we will face undue upward pressure on existing home values and unrelenting tightness in rental markets,” he says.
