Final burst from first homebuyers sends sales soaring

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The Housing Industry Association reported that new home sales rose by a staggering 11.4% in August, the best monthly results in more than three and half years.

Victoria recorded the largest gain, with 21.8%, followed by Queensland with 20.9%. NSW, however, went in the opposite direction, with new home sales slumping 11.3%.

Your Mortgage asked HIA chief economist Harley Dale if this figure was sustainable into 2010. "In a nutshell, no," he said. "There's no doubt that there's been a final burst from first homebuyers. That activity has probably continued in the first week of September and then it's trailed off."

The $21,000 grant for first-time buyers of new homes will be scaled back to $14,000 on 1 October and then to $7,000 on 1 January 2010.

Dale said he hoped for a NSW recovery soon. "But we've been hoping for so many years," he laughed. "There has been some movement off a very low base. But it's a market that's so difficult to operate in, relative to pretty much anywhere else in the country."

 

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