New home sales grew modestly last month, suggesting the property market is on track for a full recovery.
According to the latest Housing Industry Association – JELD-WEN New Home Sales Report, the number of new homes sold increased by 2.5 per cent in January 2011.
Detached house sales increased by 2.2 per cent while the sale of multi-units rose by 5 per cent.
HIA chief economist Harley Dale said the modest increase in new home sales in January was encouraging.
“The new home building sector was buffeted in 2010 by rising interest rates and a lack of policy reform to wind back the impact of the dead hand of regulation on new housing costs,” Mr Dale said.
“New dwelling starts are expected to be lower in 2011. However, the prospect of official interest rates holding for some time, signalled by the Reserve Bank, could help to mitigate the decline in new dwelling starts and slow further widening in Australia’s new housing shortage.
“Following a protracted period of depressed building activity in New South Wales, there are early indications that the industry could be lifting itself off the canvas.”