Stable rates lift new home sales - but will they hold?

By Your Mortgage
New home sales figures released this week by the Housing Industry Association (HIA) are good news for developers and homebuyers. Recent stable interest rates pushed up the sale of new homes to 8,193 dwellings in February. The data shows an increase in new home sales of 2.9% from January; sales of new detached houses have risen by 3.9%. The sale of new multi-units fell by 4.2%. HIA said it is the first time in nine months that sales have tipped the 8,000 mark. Simon Tennent, HIA executive director of housing and economics, said he is doubtful the figures will end Australia's sales slump, as interest in new homes is typically stronger at the start of each year. "There's cautious optimism among most volume home builders across the nation, however buyers are still acutely aware that they're not out of the woods yet following the most recent interest rate pressures," said Tennent. He added that even after saving for a deposit and costs, there is still not often enough room to move for homebuyers to beat affordability. NSW leads the increase in new home sales in February (up 16.9%), after a third consecutive rise. Western Australia and South Australia were next with a rise of 11.2% and 7.65% respectively on January's figures. Despite the initial positive results, new home sales in February are still down 10.7% on the same month in 2006.