New home sales have rebounded strongly indicating home building activity will remain strong this year.

New homes sales rose 8.9 per cent in March, following a 5.3 per cent fall in February, according to the Housing Industry Association.

Detached house sales jumped 7.0 per cent, while multi-unit sales leapt 16.3 per cent in March. HIA economist Diwa Hopkins said the positive result was consistent with Australian Bureau of Statistics building approvals data in previous months.

“The current level and trajectory of new home sales and approvals provides a strong signal that new home building activity in 2016 will remain strong,” Ms Hopkins said.

“Tuesday’s cut to the (Reserve Bank’s) official cash rate (to 1.75 per cent) will also provide additional support to the residential construction sector.”

Sales of detached homes rose in Queensland, Western Australia, NSW and Victoria in March, with Queensland the strongest market, recording a 13.2 per cent rise in detached house sales.

SA was the only mainland state to post a decline in March, with sales falling 6.9 per cent. While new home sales in the March quarter increased 2.8 per cent over the December 2015 quarter, they were 1.7 per cent lower than the March quarter of 2015.


The HIA report said Victoria recorded the strongest growth in detached house sales over the March quarter – up 11.2 per cent on the previous quarter. SA recorded the biggest drop in quarterly detached house sales with a 5.7 fall, while NSW was down 4.0 per cent.