Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Thursday, 5 February 2015

New home sales rise by 14.4 percent

New home sales up 14.4 percent

New home sales moved 4.9 percent higher over the December quarter to be 14.4 percent higher than a year ago.

The result was driven by an uplift in detached housing sales in Queensland (+2.6 percent) and Western Australia (+2.8 percent) offset by a decline in South Australia (-5.3 percent).

Unit and apartment sales were also driven by Queensland (+11.6 percent) and Western Australia (+13.4 percent) offset by a decline in South Australia (-7.5 percent) and New South Wales (-10.3 percent). 

Sydney prices booming

Meanwhile Residex released its latest housing market figures which showed that Sydney is leading the way in terms of house price growth, prices rising by nearly 5 percent in the December quarter to be 17 percent higher over the year.

In terms of units, Sydney led the way in 2014 there too, recording 3.6 percent growth over the quarter to be 13 percent higher over the year.

It is worth noting that in aggregate rents in Sydney have recorded growth for houses (+8.4 percent) and units (+3.1 percent) suggesting that there is little evidence of oversupply on a city-wide basis.

Mixed results

Residex noted that "the growth in the Sydney market in dollar terms is in boom conditions", observing that Sydney was the "only city to be doing really well".

Certainly price growth has been relatively soft or negative in Darwin, Hobart, Canberra, Adelaide, and most regional markets

However, Brisbane looks to be shaping up well (at least, for the right property type) with house prices rising by 2.7 percent over the last quarter to be 6 percent higher year-on-year.

Interestingly Residex noted that it will not release its January figures for a couple of weeks "in about two weeks when the January growth numbers are firm and we are confident they reflect the actual outcome for the month."

Generally in financial markets this type of rhetoric often means that the data has thrown out an abnormal result, which the remainder of the piece suggests might be extraordinary price growth in Sydney.

I guess we'll find out in a fortnight's time.