Australian new home sales were steady in February

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Australian new home sales rose slightly in February, according to data released by Australia’s Housing Industry Association (HIA) on Thursday.

Total sales edged higher by 0.2%, with a decline of 0.1% in detached housing sales offset by a 1% increase in multi-unit sales.

Source: HIA

For detached housing, the HIA said sales rose in two out of five mainland states.

“Detached house sales in Western Australia increased by 11.3% following a rise of 12.1% in January,” said Harley Dale, chief economist at the HIA, noting that the growth over the past two months was “exaggerated by the extremely low base for detached house sales”.

Elsewhere, sales rose by 5.1% in Victoria but fell by 12.6%, 5.7% and 0.2% in New South Wales, Queensland and South Australia.

Dale said that he wasn’t surprised by the February result given the trend in forward-looking building approvals data released by the ABS.

“The updates that we are receiving for these two key leading indicators of new home building activity are consistent with a modest reduction in national new detached house commencements in 2016/17,” he says.

“We are forecasting a decline of 2% in detached house commencements in Australia in 2016/17 following a similar-sized fall of 1% in 2015/16.”

By state, Dale says that detached house sales to slowly improve for Western Australia and South Australia in the period ahead, although they’re likely to trend lower along Australia’s eastern seaboard in his opinion.

The ABS will release updated building approvals figures for February on Monday, April 3.

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