Sales for new homes surged by 9.5% in January 2010, underpinned by strong interest from second homebuyers and investors, according to a survey of Australia’s largest residential builders. HIA’s New Home Sales report shows sales of privately-owned detached houses climbed by 10.1% in January – the first decent result since August last year.

Multi-unit sales recorded a second consecutive increase in January (rising 4.1%) following a 14.5% jump in December 2009. “The January result was an encouraging early sign that upgrading owner occupiers and investors may be coming into the new home-building market in sufficient numbers to offset the withdrawal of stimulus to first-time buyers,” said Harley Dale, HIA chief economist. “If we were to get a sustained improvement in new home sales over the first half of 2010, then that would suggest a second round new housing recovery is achievable, driven by private demand from upgrade buyers and investors.

“The January new home sales result is a promising start in this regard. However, it is vital to see evidence of a second round recovery emerge in coming months in what remains a very challenging period for residential construction,” he added. Detached new home sales rose by 3.1% in NSW, Victoria surged by 17.1%, Western Australia jumped 12.2%, Queensland was up 6.3% and there was a 6.6% increase in South Australia.