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Slight rise in new Australian home sales

The Australian property market recovered slightly in May following the RBA's rate cuts.

The Reserve Bank of Australia's (RBA's) decision to cut rates led to a slight boost in the number of people buying new homes over the course of May, according to the latest figures from the Housing Industry Association (HIA).

Its May HIA-JELD-WEN New Home Sales report recorded a 0.7 per cent jump in purchases, with a 21.1 per cent increase in the number of apartments sold.

However, detached houses fell by two per cent, according to the survey.

HIA chief economist Harley Dale suggested that the rate cuts seen at the end of 2011 and in May 2012 have not had a sufficient effect on the market, but expressed his optimism for the coming year.

"We expect that through the second half of 2012 the aggregate impact of interest rate cuts ... will at the very least put a floor under new home sales," he said.

Mr Dale recently encouraged the government to take action to reform the housing sector after home building dropped in the last quarter.

Posted by Craig Francis

- property, sales, interest, rates, RBA

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