While sale volumes of multi-unit dwellings recorded a modest decline of 3.8%, total figures were more adversely affected by a 6.9% in the sale of new homes in April.
A cautious return to the market by first homebuyers and to a lesser extent, investors, helped to partially stem a decline in unit sales, according to Simon Tennent, the HIA's executive director of housing and economics.
"We've been noticing a little resurgence in the unit markets, and this is due to first homebuyers and some investors are purchasing medium density dwellings such as townhouses.
"Townhouses are increasing in popularity with these buyers because they are cheaper than house and land packages, especially in the capital cities where land values are very high," he said.
Restricted supply and rising land values contributed to falls in detached house sales in all states during April, most notably in Victoria, where sales were down 13.3%. However, Victoria's data was slightly skewed by a recent cut in the first homebuyers' grant offered by its State Government, according to Tennent.
Elsewhere, detached home sales were down 5.6% in NSW, 4.9% in South Australia, 4.7% in Queensland and 2.6% in Western Australia.
The HIA foresees a gradual improvement in home sales towards the end of 2006, notwithstanding an anticipated dampening effect on activity from the May interest rate rise, which has not been captured in these April figures. A soft recovery is predicted for 2007.
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