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First home buyers boost new home sales

02 Mar 2009 12:52 PM

SYDNEY, March 2 AAP - New home sales surged by almost nine per cent per cent in January thanks to increased activity by new home buyers, a survey shows.

The Housing Industry Association (HIA) said the best home affordability conditions in five years and a boost to the first home owners grant had propelled the sale of new detached houses.

Detached home sales increased by 9.8 per cent in the month and were up by three per cent for the three-months to January.

But pre-contract sales of apartments and home units declined for the fourth consecutive month, indicating a continued softness in rental investor activity.

"A better start to 2009 for new home sales is an encouraging result," HIA chief economist Harley Dale said.

"But a sustained recovery in new home construction will rely on trade-up buyers and investors returning to the market, and the timely procurement of the planned 20,000 new public and community housing dwellings."

Dr Dale said the unlocking of many of the private dwelling projects caught up in the credit crunch would go a long way to ensuring a broad-based private sector housing recovery.

"A rapid start to the federal government's public housing stimulus plan announced in early February is a vital cog in transitioning the industry to recovery."

For the month of January detached new home sales increased by 24.2 per cent in South Australia and were up by 19.3 per cent in Victoria, 10.9 per cent in Queensland, and 0.9 per cent in Western Australia.

Sales fell by 5.8 per cent in New South Wales.