If the Reserve Bank of Australia (RBA) decides to cut interest rates tomorrow, it will not be because of Australia’s housing market.
House prices and auction clearance rates are both continuing to rise at a steady clip following the RBA’s most recent rate cut in May.
Now you can add new home sales to the list of robust housing market reports.
According to data released by the Housing Industry Association (HIA) on Monday, new home sales surged in June after two months of consecutive declines, jumping 8.2%.
“Multi-unit” sales jumped by 11.5% following a 4.9% gain in May, outpacing a solid 7.2% lift in sales of unattached houses.
As shown in the chart below, supplied by the HIA, sales in June were the second-highest number seen this year, and left sales volumes near the peaks struck in mid-2015.
While the HIA does not release details of multi-unit sales, the group notes that sales of unattached housing rose in all mainland Australian states, led by Queensland, which recorded a giddying 14.9% increase.
Elsewhere sales rose by 9.1%, 7.5%, 3.7% and 2.2% in Western Australia, New South Wales, South Australia and Victoria respectively.
From a longer-term perspective, and after digging into the data, the HIA notes that “the large geographical divergences between state housing markets will continue”.
Comparing the June quarter this year to the same period last year, detached house sales are down very sharply in South Australia (-21.4%) and in Western Australia (-27.5%), yet sales are up by 17% in Victoria and by 7.1% in Queensland,” said the HIA.
“New South Wales rounds off the detached house coverage (with) sales down by 7.3% on an annual basis.”
Despite the surge in buying activity seen in June, Harley Dale, chief economist at the HIA, isn’t overly excited by the bounce in sales volumes.
“The overall trend is still one of modest decline for New Home Sales, but a bounce of 8.2% in June 2016 highlights the resilience of the national new home building sector,” he said.
“The overall profile is signalling an orderly correction to national new home construction in the short term, as are other leading housing indicators.”
The Australian Bureau of Statistics will release building approvals data for June — a lead indicator for future new home sales and construction activity — on Tuesday at 11.30am AEST.