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New home sales hit cyclical high

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Australian sales of new homes hit a cyclical high in February, driven by apartments, while detached home sales continue to decline.

According to the Housing Industry Association's survey, sales of new houses increased by 1.1 per cent in February, following a gain of 1.8 per cent in January.

The volume of sales is now just above the previous cyclical peak in April last year, HIA chief economist, Harley Dale, said.

"The headlines for the national new housing sector continue to dazzle in early 2015,” Mr Dale said.

The February rise in new home sales was driven by apartment sales, which jumped 11.1 per cent in the month, while sales of detached houses slipped by 1.3 per cent.

Mr Dale said the slight decrease in detached home sales did not represent the demise of the stand-alone home, with detached house building still seeing volumes above the long-term average.

But he said detached house sales were easing in New South Wales and Western Australia, states which were previously key drivers of growth, with modest increases in Queensland and Victoria "not enough to offset these declines". 

Sales of new detached homes lifted 1.5 per cent in Victoria and 0.2 per cent in Queensland, while declining 4.8 per cent in New South Wales, 2.9 per cent in Western Australia and 2 per cent in South Australia.

On the other side of the equation, the Australian Bureau of Statistics building approvals statistics and the HIA new home sales report both signal that multi-unit sales, or apartment sales, will experience further upward momentum, Mr Dale said.

CommSec economist Savanth Sebastian said the demand from property investors was fuelling demand for the construction of multi-unit blocks.

Separate figures released on Tuesday showed housing loans for investors lifted 10.1 per cent in the year to February.

"It's clear that investors are driving the property market and no doubt they are particularly supporting the new developments and the new unit blocks that are going up," he said.

"It's driven by the change in demographics across the Australian landscape it's also the ageing population that is downsizing their homes."

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HIA survey shows new homes sales increase 1.1% in Feb, driven by apartment sales.

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