New home sales market on recovery street.
Although Australians are still cautious about spending, low interest rates on home loans has put the market into a state of recovery.
Results of the Housing Industry Association New Home Sales report for April 2013, based on a survey of Australia's largest volume builders, showed an average increase across the board for new home sales in April 2013. Continuing the trend of recovery that has been unfolding since late 2012.
Detached house sales were the major headline with strong growth across all states, except Queensland, averaging a national increase of 6.7 percent.
"While multi-unit sales have softened over recent months, the gains made over the course of 2012 have not been eroded. A broader look at the situation shows that the volume of sales in the three months to April this year is still 51.7 percent higher than trough experiences a year earlier," said HIA senior economist Shane Garret.
But according to Mr Garret there are still large obstacles in place if the housing market is to fill in the void left by the slow down in the mining sector. Australian households are currently cautious on spending and have been using low interest rates to reduce debt, opposed to increasing borrowing. Meanwhile home builders and developers face tight credit conditions, putting strain on sales and new building.
However a record low 2.75 percent official cash rate has resulted in a number of lenders passing on significant reductions in interest rates to mortgage holders. Borrowers can compare home loans to find the best rates on Mozo.
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