Market Watch: New home sales continue to rise

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New home sales continue to rise
New figures from the Housing Industry Association show that sales of new homes have continued to grow. The latest figures, for November 2014, reveal seasonally-adjusted growth of 2.2 per cent from the previous month with multi-unit sales surging over a two month period to their highest level since 2003. In contrast there was a 1.5 per cent dip in new detached homes in November. HIA chief economist Harley Dale expects the dominance of units to continue this year and says there would need to be some policy changes to tip the balance: “A focus on housing policy reform would greatly assist in rebalancing the table, providing a further burst of growth in detached house construction which would at the same time provide productivity gains for the broader Australian economy. That should be a policy no-brainer.” In the month of November 2014 detached house sales increased by 4.0 per cent in Victoria, 16.0 per cent in Queensland, and 0.3 per cent in South Australia. Detached house sales fell in November in New South Wales (down 5.6 per cent) and Western Australia (down 10.6 per cent, following a 24.8 per cent rise in October).

Prices rise in South Australia 
The median price of homes in South Australia grew by 2.64 per cent in the December quarter and by 1.87 per cent from the same period in 2013, according to figures from the Valuer General. That means the median price was $272,000, just short of the record high recorded earlier in the year. In the Adelaide Metro median prices increased by 3.16 per cent over the previous quarter to $425,000. The president of the Real Estate Institute of South Australia, Greg Moulton commented: “The regional results are almost identical to those found in metropolitan Adelaide. Median prices are at record levels but the volume of sales has remained steady or slightly dropped. However, as interest rates continue at their historically low levels, more and more vendors and purchasers will enter the market place as the year goes on.” The top selling suburbs were Mount Gambier, Victor Harbour and Murray Bridge. Murray Bridge also saw the greatest increase in sales in the quarter, up 17.78 per cent and followed by Naracoorte (up 15.4 per cent) and Port Augusta (up 7.48 per cent).

Foreign investment on commercial property hits a new high
Almost a third of commercial property purchases last year involved foreign investors, marking a new record high. Data from Dexus reveals that a record $28.1 billion was spent on commercial real estate in 2014 with increases in foreign investors swayed by Australia’s relatively stable economic growth and the quality of the properties. Sydney and Melbourne are enjoying increasing demand for office space although there is slower growth in Brisbane and Perth. Overall the company’s research suggests a strong year of activity for 2015.

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