Sales of new homes are rising in 2007 following a slump last year, according to the Housing Industry Association (HIA). The latest figures showed that the sale of new houses and units among Australia's largest builders and developers increased by 5.8% in January to 7,963 homes. Private detached house sales rose by 5.8% and multi-unit sales rose by 6%. New home sales in Queensland were up 13 % for the month, compared with 7.3 % in Victoria, 0.4 % in Western Australia and 0.4 % in New South Wales. South Australia bucked the uptrend with sales falling by 7.7% in the same period. HIA believes this positive building trend will help to alleviate the current squeeze on housing supply around the country. Simon Tennant, HIA executive director of housing and economics, says it was unlikely that sales would rebound to the highs of last year, following the three interest rate rises of 2006. "The majority of larger builders across Australia reported that the worst appears to have passed and that there has been some interest from investors, particularly in South Australia and Queensland," he says. Tennant believes the problem of housing affordability will continue until the end of the decade, when stagnant house prices and rising wage growth will reduce the issue. "Any additional measures, in particular the easing of the tax burden on new housing and an increase in the supply of affordable vacant land, will obviously turn things around a lot quicker," says Tennant.