Detached house sales strong
New home sales are continuing to make headlines in Australia, with a fourth consecutive monthly gain being noted by the Housing Industry Association (HIA) in a May 29 statement.
With cheap home loans on offer to buyers thanks to a record low official cash rate (OCR), it's no wonder home buyers are looking to snap up new properties across the country.
The OCR has rested at a favourable 2.5 per cent since August last year, with the latest cash rate decision indicating ongoing stability for some time.
According to the HIA, the gains are important as they are not only beneficial for the immediate sector, but also send a "positive signal for broader economic activity".
HIA Chief Economist Harley Dale explained how new home building recovery is a core part of the country's economic growth.
"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," Dr Dale explained.
So far, market forces have mostly overcome tax and regulatory burdens plaguing the property sector, Dr Dale noted.
However, Dr Dale emphasised that these factors, along with a structural shortage of skilled labour, could affect productivity in the sector.
In order to overcome such impediments, federal and state policy makers need to actively address such issues, he urged.
"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," the HIA explained.
Whether you're thinking about buying a new property or an existing dwelling, make the most of the low home mortgage rates available and act today.
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