The 5.7 per cent increase in new home sales in September takes sales figures back to mid-2018 levels.
The new home sales figures, compiled by the Housing Industry Association from a survey of the largest volume home builders in the country, are a reasonable forward-looking indicator for building approvals.
And with approvals continuing to contract, the new home sales figures are a positive predictor of the residential land market going forward.
“This improvement is a welcome reprieve from the steady decline that emerged in late 2018,” HIA economist Angela Lillicrap said.
“It remains too soon to confirm that we have passed the bottom of the cycle, but this result does highlight that we are not likely to see further material falls in new home sales.”
Building approvals remain 16.2 per cent down on the three months to August 2018.
The gains for the September quarter were not enough to offset earlier weak sales figures, with Queensland the only state to experience a significant increase—up 6.9 per cent—in home sales compared with the previous June quarter.
Private new home sales in Queensland are still 21.8 per cent down on the same quarter last year.
Lillicrap said moderate population growth, particularly from interstate migration, will sustain the demand for new houses in Queensland.