 Gains in the new home sector
New home sales were up 8.3 per cent in January giving the housing sector a glimmer of home for the future. New data from the Housing Industry Association shows that sales of detached houses increased 9.8 per cent for the month up 3 per cent for the November-January quarter.
A combination of government grants and lower rates are thought to be the driving factor behind the rise.
"The best home affordability conditions in five years and the boost to the first home owners grant propelled the sale of new detached houses," said Harley Dale, the chief economist of the Housing Industry Association.
Most states recorded gains over the previous three months with South Australia boasting a rise of new home sales of 24.2 per cent, and Victoria, New South Wales and Western Australia all recording positive numbers also.
The boost to the First homebuyer grant may be a large factor in these impressive figures. In October last year, the government tripled the grant to $21,000 for newly constructed homes or the building of a new home. This together with lower interest rates is encouraging buyer back to the market.
These figures may persuade the Reserve Bank of Australia to leave rates unchanged when the meet later today. Many economists are however predicting a rate cut of 50 basis points.
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