New home sales improve in March: HIA

By a staff reporter

New homes sales continued their modest recovery, lifting in March in a return to volumes posted a year ago, according to a leading index. 

The Housing Industry Association's New Home Sales report showed that total seasonally adjusted new home sales increased by 4.2 per cent in March. 

HIA chief economist Harley Dale said the recovery since last November, following record lows reached in 2012, meant sales volumes were "at low rather than record low levels". 

In the month of March new detached house sales increased by 3.9 per cent, following a 4 per cent decline in February.

Sales of multi-units rose by 5.6 per cent for the month, after dropping by 11 per cent in February. 

"The key will be whether a recovery can gather legs from here in an environment where the tax and regulatory costs on new housing remain excessive (and are borne by the final home buyer) and where many new home building contracts continue to fall over because a final finance approval is declined," he said. 

HIA said the federal government had the opportunity to boost new housing supply through economic reform, which would increase productivity and revenue.

“It is vital that in Australia's deteriorating budgetary environment there is a keen focus on spending constraint, although a myopic attack on current legislated policies which are making a positive economic contribution should be avoided."

In March, detached house sales increased by 16.3 per cent in New South Wales, 7.3 per cent in Victoria, 3.2 per cent in Queensland, and 5.7 per cent in South Australia. However, Western Australia posted a fall of 5.6 per cent, following three consecutive rises.