New home sales edged up for the third straight month in June following the Reserve Bank’s most recent interest rate cut in the same month.
The Housing Industry Association’s new home sales report showed a 2.8 per cent rise in new home sales, driven by a 15.7 per cent surge in apartments and townhouses. In May, new home sales rose 0.7 per cent.
“But all the action has been in the multi-unit sector,” said HIA chief economist Harley Dale.
Stamp duty concessions in the first half of the year in NSW drove a 30.8 per cent increase in apartments and units in that time.
“Detached housing, which still accounts for 70 per cent of new housing starts in Australia, was disappointing,” said Mr Dale.
Standalone houses sales rose by 0.7 per cent in June, following a 2 per cent drop in May, the HIA said.
House sales plunged 9.6 per cent in Victoria and 11 per cent in Queensland in June, while surging 23.5 per cent in Western Australia. They rose 2 per cent in New South Wales in the month.
Home loans and auction clearance rates, both leading indicators of demand for real estate, have remained mixed despite the nearly 100 basis points in cuts passed along from banks to borrowers after the string of RBA rate cuts since November.
Clearance rates have hovered around 60 per cent in Sydney and Melbourne in recent weeks, well below the highs of 80 per cent seen two years ago. Home loan applications, meanwhile, dropped 1.2 per cent in May.
HIA said that over the quarter, house sales were down 6.2 per cent in New South Wales and 21.1 per cent in Queensland, while jumping 9.8 per cent in Victoria ahead of the end of the state new home buyers grant boost.
In Western Australia, changes to the building act in that state sent new house sales 9.3 per cent higher in the quarter.
Auction clearance rates in Sydney rose to 60.5 per cent last weekend, from 59.8 per cent the week before, according to Fairfax-owned Australian Property Monitor. In Melbourne, the clearance rate was 61 per cent, from 59 per cent the weekend before.
Story by Chris Zappone, Reporter, Business Day www.domain.com.au