The strength of demand from home buyers has been evident in the number of new home sales in early 2014, after the Housing Industry Association (HIA) found an increase in properties sold.
Over January, the HIA recorded a 0.5 increase in the number of new home transactions. While only a small rise, this was a very positive result after new home sales experienced a small decline in the previous month.
Interestingly, it was brand new multi units that saw a higher rate of sales than detached homes, after rising by 1.6 per cent. Whether this is due to increased investor activity in large areas such as Sydney, or a shift in owner occupier preference, there's no doubting this type of housing is rising in popularity.
While this increase in new home sales comes after a small decline, transactions for new properties have actually been rising steadily for quite some time.
"New home sales have been rising pretty steadily since the third quarter of 2012, encouraged by the falling interest rates and the return of confidence to the housing market," said HIA Senior Economist Shane Garrett in a March 3 statement.
Looking at year-on-year figures, new home sales have increased by a staggering 22.3 per cent over the three months to January compared to the same period in the previous year.
Over the January quarter, much of this activity in new home sales has been concentrated in South Australia (50.4 per cent), Queensland (17.8 per cent) and New South Wales (6.2 per cent).
As the latest cash rate decision resulted in the rate staying unchanged for another month, this could have flow on effects to new housing sales. Commenting on future predictions for the housing market in a March 5 statement, Loan Market Director Mark De Martino said "there's no reason confidence shouldn't continue to build for homeowners and buyers".
Approvals rise to meet demand
While demand has increased for brand new residential real estate in Australia, so too has the number of properties approved in recent months. Over January, the Australian Bureau of Statistics found dwelling approvals reached a 10-year high after rising by 6.8 per cent in seasonally adjusted terms.
States that saw the highest increases in dwelling approvals, seasonally adjusted, were Victoria (10.4 per cent), New South Wales (5.4 per cent) and South Australia (10.5 per cent).
"Over the past twelve months, approvals have totalled over 182,000, the highest twelve month total since 2004. In the three months to January, approvals were at an annualised level of over 200,000," commented Mr Garrett.
With approvals rising, there could be more housing stock hitting the market in coming months, taking the pressure off certain areas around the country.
