Australian New Homes Sales Climb to 4yr High

Sales of new homes in Australia jumped in March to their highest since early 2010 as falling mortgage rates and the lure of rising house values drove demand.  The Housing Industry Association (HIA) said its survey of large volume builders showed sales of new homes rose 4.4 percent in March, from February when they increased by 1.1 percent.

Sales of multi-units jumped 11.3 percent in the month, while sales of detached homes rose 2.6 percent.  “The residential construction sector continues to be the main bright spot in the broader domestic economy, with updates to the sector showing its ongoing strength,” said HIA economist Diwa Hopkins.

“Lower lending rates will provide added support to residential construction activity, which is emerging as a key area of growth mitigating the effects of the downturn in mining investment and construction.”  The Reserve Bank of Australia (RBA) trimmed its cash rate to a record low of 2.0 percent on Tuesday, which was quickly followed by cuts to mortgage rates by the major banks.