Australia recently saw its first interest rate cut in two and a half years, and this has had a positive effect on the sales of new homes which have increased by 6.8% from October to November. Sales of detached properties increased by 9.8% which was mainly due to more properties being sold in New South Wales and Victoria.
However the picture isn't quite so rosy for multiunit sales which fell by 17%. Experts have played down the increase saying it is only to be expected as two months earlier sales of detached homes fell to an 11 year low which was partly due to speculation about a rate cut, and although this latest news is welcome sales volumes are currently at least 20% below levels required for a healthy market.
They point out that a sustained government stimulus is needed to bring about a strong recovery within the homebuilding market. In November sales of detached homes increased in four out of the five main and states and were up by 22.8% in New South Wales, by 11.6% in Victoria, by 5.7% in Western Australia and by 4.7% in Queensland.
In South Australia sales fell by 11.3%. It is however a great time for anyone wishing to build a new home as the building market is very competitive with a good availability of skilled trades combined with lower interest rates creating favourable conditions. Some economists are even predicting further interest rate falls as early as next month in an effort to boost retail sales and lift consumer sentiment.
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