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New home sales partial recovery in April buoyed by Victorian first-home bonus deadline: HIA
The nearing end of Victoria’s $13,000 first home bonus has helped national new home sales mount a partial recovery in April following a very weak end to the first quarter of 2012, the Housing Industry Association has reported.
The HIA - JELD-WEN new home sales report, based on a survey of Australia’s 100 largest builders, showed a 6.9% rise in total seasonally adjusted new home sales in April.
Detached house sales rose by 6.4%, while multi-unit sales were up by 10.3%.
New detached house sales increased by 17.2% in Victoria, ahead of the removal of the first-home bonus, the HIA noted.
Detached house sales also increased in Western Australia by 9.8% and New South Wales by 1.8%.
However, detached house sales fell by 5.9% in South Australia and by 5.5% in Queensland.
The increase in Victorian home sales was the first gain in five months, the CommSec chief economist, Craig James noted.
"The good news is that Victorian house sales soared.
"The bad news is that the upcoming expiry of the First Home Bonus probably had a lot to do with it.
"And unfortunately in economics it can get like that – on the one hand this, on the other hand that.
"However it is clear that home building is weak, certainly well below averages over the past five years," Craig James said.
It was in part that Australians lacked confidence to build, he added.
"Others are opting for shared accommodation, whether it be Gen Y renting apartments together or staying home with their parents. Or it may be that senior Australians are opting to live with their children and grandchildren.
"Certainly home occupancy has been rising over the past two years – something that hasn’t happened in over a century," Craig James said.
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HIA chief economist Dr Harley Dale says the April lift in new home sales of both detached houses and multi-is was an “imperative result”.
"Even with this latest improvement, the aggregate volume of both new home sales and local government building approvals imply that in the absence of a rapid and sustained recovery, national new home building is heading to a recessionary level in 2012.
“That’s an unfortunate fact which everybody needs to face and which requires further interest rate cuts and immediate government action,” Dale says.
“We keep hearing that Australia is one of the world’s strongest economies in aggregate.
“That’s a redundant concept if people on the ground aren’t feeling and experiencing that, and they haven’t been for quite some time,” he says.
"Further interest rate cuts are required, and the Reserve Bank should just get on with the job on June 5.
“However, rate cuts are not a panacea and the key to a housing recovery lies with governments at all levels.
“Job losses are mounting and governments need to collectively act to revitalise new home building through reducing the sector’s excessive tax burden and through an immediate injection of investment and funding,” the HIA press release says.
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