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31-05-2015, 08:03 AM
New home sales hit five-year high as apartments snapped up
Michael Bleby
560 words
30 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
New home sales in April rose to their highest level in more than five years, with demand for apartments picking up as detached home sales slowed.
Sales rose 0.6 per cent from March to 8120, the highest number since the first quarter of 2010, the Housing Industry Association said on Friday.
The disparate nature of the housing economy shows, however, that just as Sydney and Melbourne are booming while others slow, the mix of housing sold is also changing.
Detached home sales rose in the two largest cities — and even accelerated to 7.2 per cent last month from 4.2 per cent in March in NSW — but Queensland suffered an unexpected 9 per cent decline after a smaller 2.3 per cent fall in sales in March.
Even in NSW and Victoria, however, there are signs that sales of stand-alone houses have peaked.
Figures for the three months to April give an indication of a moderating market. NSW chalked up 3649 detached home sales in the April quarter, up 0.5 per cent on the previous three months, but down 10.9 per cent from the 4095 sales in the same period a year earlier.
In Victoria, the April quarter's 5534 sales was up 7.4 per cent from the previous three months and down 4.2 per cent from 5774 a year earlier. Over the same period, however, apartment sales jumped 57.7 per cent to 5291 nationally, from 3356, in the same three months of 2014.
"The rate of sales of apartments is continuing unabated at the moment," said Andrew Buxton, the managing director of MAB Corporation, which has sold about 85 per cent of the 420 apartments in its two-tower Promenade development in Melbourne's Docklands and will in coming weeks bring its next tower, the adjacent 110-apartment Banksia, to market.
"We're just about to go to market, with Banksia pitched purely at owner-occupiers," Mr Buxton told The Australian Financial Review. Month on month, sales of apartments, townhouses and semi-detached dwellings were up less than 1 per cent, the HIA figures show.
The total new sales figure was the weakest out of the past four months of uninterrupted growth.
"This is still a strong result," HIA chief economist Harley Dale said. "The profile for new-home sales in 2015 is consistent with a new-home building cycle where further upward momentum resides largely in the 'multi-unit' sector and where the eastern seaboard states are driving the further growth."
Opinions are divided about the strength of housing construction, but the report adds strength to arguments that the cycle, driven by pent-up demand in Sydney, record low interest rates and constant investor demand, is reaching its peak.
The report gives more detail on sales of detached houses - the builders of which make up the HIA's core membership - than of apartment sales. It shows that apart from the key drivers of NSW and Victoria, where sales rose 2.7 per cent, stand-alone house sales rose 0.9 per cent to 1505 in WA.
While Queensland marked the biggest decline, home sales also fell 1.9 per cent in SA to 418. The HIA report does not give details for Tasmania, NT or ACT.
Fairfax Media Management Pty Limited
Document AFNR000020150529eb5u0001a
Michael Bleby
560 words
30 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
New home sales in April rose to their highest level in more than five years, with demand for apartments picking up as detached home sales slowed.
Sales rose 0.6 per cent from March to 8120, the highest number since the first quarter of 2010, the Housing Industry Association said on Friday.
The disparate nature of the housing economy shows, however, that just as Sydney and Melbourne are booming while others slow, the mix of housing sold is also changing.
Detached home sales rose in the two largest cities — and even accelerated to 7.2 per cent last month from 4.2 per cent in March in NSW — but Queensland suffered an unexpected 9 per cent decline after a smaller 2.3 per cent fall in sales in March.
Even in NSW and Victoria, however, there are signs that sales of stand-alone houses have peaked.
Figures for the three months to April give an indication of a moderating market. NSW chalked up 3649 detached home sales in the April quarter, up 0.5 per cent on the previous three months, but down 10.9 per cent from the 4095 sales in the same period a year earlier.
In Victoria, the April quarter's 5534 sales was up 7.4 per cent from the previous three months and down 4.2 per cent from 5774 a year earlier. Over the same period, however, apartment sales jumped 57.7 per cent to 5291 nationally, from 3356, in the same three months of 2014.
"The rate of sales of apartments is continuing unabated at the moment," said Andrew Buxton, the managing director of MAB Corporation, which has sold about 85 per cent of the 420 apartments in its two-tower Promenade development in Melbourne's Docklands and will in coming weeks bring its next tower, the adjacent 110-apartment Banksia, to market.
"We're just about to go to market, with Banksia pitched purely at owner-occupiers," Mr Buxton told The Australian Financial Review. Month on month, sales of apartments, townhouses and semi-detached dwellings were up less than 1 per cent, the HIA figures show.
The total new sales figure was the weakest out of the past four months of uninterrupted growth.
"This is still a strong result," HIA chief economist Harley Dale said. "The profile for new-home sales in 2015 is consistent with a new-home building cycle where further upward momentum resides largely in the 'multi-unit' sector and where the eastern seaboard states are driving the further growth."
Opinions are divided about the strength of housing construction, but the report adds strength to arguments that the cycle, driven by pent-up demand in Sydney, record low interest rates and constant investor demand, is reaching its peak.
The report gives more detail on sales of detached houses - the builders of which make up the HIA's core membership - than of apartment sales. It shows that apart from the key drivers of NSW and Victoria, where sales rose 2.7 per cent, stand-alone house sales rose 0.9 per cent to 1505 in WA.
While Queensland marked the biggest decline, home sales also fell 1.9 per cent in SA to 418. The HIA report does not give details for Tasmania, NT or ACT.
Fairfax Media Management Pty Limited
Document AFNR000020150529eb5u0001a