By Chris Zappone
New home sales have posted gains for the second month running, as buyers warmed to lower interest rates and more generous government grants.
Total new home sales grew by 3.9% in February, following an 8.6% increase in December, the Housing Industry Association said.
"The project home building market is gaining much-needed stimulus from low variable mortgage rates and from the boost to the First Home Owners Grant," said HIA chief economist Harley Dale in a statement.
Within the February figures, house sales gained 4.7% in February, the HIA said, while pre-contract sales of apartments and home units dropped 3.4% over the same period.
"The number of detached home sales of large-volume builders has been trending higher for five months now," Dr Dale said. "This is evidence that the tripling of the Federal Home Owners Grant is working in generating new home building activity and employment."
House sales in Victoria eased 5.6% in February, in an anticipated fall after the state's home sales in the previous two months jumped 24%.
"Looking at the three months to February 2009, sales were up by 20% to a volume 1% higher than over the three months to February 2008," the HIA said.
"This is the strongest result of all the states and reinforces the anecdotal evidence that post the tripling of the FHOG, Victoria has been the healthiest new home building market."
New home sales in New South Wales shot up 11.17% in February,
"A strong December 2008 and February 2009, with a reasonable month in between, delivered a 14% surge in sales over the three months to February this year," the association said.
However, the State’s sales were still down by 17% compared to the three months to February 2008.
The sunshine state led the nation in new home sales with a 21.7% jump in February, following an 11.2% increase in January.
"The volume of sales has now increased strongly over two straight months, albeit from a very low base," the report said.
"The rebound in the last two months is encouraging and provides an indication that interest rate and first home buyer stimulus is having a positive impact."
In Western Australia, which has been buffeted by the slowing demand for resources, new home sales held up in February, increasing 4.2%.
"This is the third modest rise in four months and provides evidence of a stabilisation in new home building conditions," the report said, however in the three months to February they dipped 3%.
"There may continue to be little evidence of a recovery as opposed to a stabilisation for a while yet, but the overall steady profile for sales volumes over a period of about nine months now is a good result."