Market/Finance News Blog: Strong start for new home sales

By the resi financial blog team, 10 February 2015

Market/Finance News Blog: Strong start for new home sales

The home building industry look to continue their upward trajectory into the new year, with the Housing Industry Association (HIA) and Australian Bureau of Statistics (ABS) revealing that new home sales have had an exceptional start to 2015. After months of speculation about interest rates and growing house prices, the growing number of sales will come as a relief to property market analysts across the country. 

HIA Economist, Diwa Hopkins said the number of news homes being built remained strong throughout last year, following a similarly good year in 2013.

The ABS has confirmed the sunny outlook for construction, with building approval data showing that the number of dwellings approved rose 1.3 per cent in December 2014 and has been increasing for seven months.

Sales of new homes were up 14.4 per cent in 2014 than in 2013, and this is set to sustain healthy growth into 2015. Ms Hopkins noted that the combination of strong residential construction, lowered interest rates and increasing building approvals provides an ideal platform for home sales as this year progresses.

"The two key leading indicators of new home building activity, new home sales and residential building approvals, both saw increases during the December quarter of 2014. This is a clear indication that actual residential construction activity will rise in the current early months of 2015, which is good news for the broader domestic economy in addition to the housing sector," Ms Hopkins said.

She pointed to the RBA's decision to slash the official cash rate as a particular variable that will have an impact on residential construction in 2015. However, she also noted that the cut has spurred some lenders to tighten their loan conditions in some areas of the housing market. In part, this has to do with surging house prices in certain cities and concerns over a potentially overheating market. 

If you'd like to know more about how you can get a foot on the property ladder in 2015, contact resi today and speak to a home loan specialist

Categories: Home Loans