New home sales increased for a second consecutive month in June 2012 due to a spurt in multi-units.

The Housing Industry Association’s New Home Sales report, showed a rise of 2.8 per cent in June 2012 due to a 15.7 per cent jump in the sales of multi-units.

Detached house sales continued their disappointing run in 2012, growing by only 0.7 per cent in June following a decline of 2.0 per cent in May.

"It is encouraging to see a second consecutive jump in the sale of multi-units," HIA chief economist Dr Harley Dale said.

“Sales were up by 30.8 per cent over the June 2012 quarter.”

"It is, however, a stark reminder of how much catching up is left in the multi-unit sector when a lift of this magnitude still leaves sales volumes 36 per cent below their ten year average.”

Over the June 2012 quarter detached house sales fell by 1.1 per cent to be a sharp 24.5 per cent lower than the volume for the June 2011 quarter.

“That’s a concerning update which sees detached house sales running at an annualised level 35 per cent lower than the ten year average and 44 below the long term history of the series," Dr Dale said.

“Lower interest rates will assist new housing in 2012/13, but the large gap between the cash rate and variable mortgage rates will blunt their positive impact.

THE ADVISER

“Investment and reform from governments is the key ingredient to lifting the new housing sector substantially above the recessionary levels of 2012. State governments have a crucial role to play, as do local governments, but it is the Federal government that needs to act first and lead by example.”

New home sales increased in December, marking a third consecutive monthly rise.

According to the Housing Industry Association's (HIA's) New Home Sales report, total seasonally-adjusted new home sales increased by 6.2 per cent in December 2012.

New home sales increased by 3.3 per cent over the December 2012 quarter, but were still 12.7 per cent lower than the level of sales during the same quarter in 2011.

“The promising headline rise last December was driven by both detached house and multi-unit sales,” HIA economist Geordan Murray said.

“Furthermore, if we look at the under-performing market for 2012 - detached houses - the December improvement was broad-based as sales increased in all but one of the surveyed states.

“However, the overall result for 2012 leaves plenty of room for improvement. Detached house sales were weak throughout the year and compared with 2011, were down by 22.7 per cent.

“On the other hand, multi-units sales were the star performer of 2012. They recovered from the record lows endured in 2011 and increased by 24.1 per cent over 2012.”

Mr Murray said he hoped further signs of a new home building recovery will emerge in coming months.

THE ADVISER

In December 2012, detached house sales increased by 7.1 per cent in New South Wales, 6.0 per cent in Victoria, 3.8 per cent in Queensland, and 12.2 per cent in Western Australia.