Australia new home sales up 0.3% in November

SYDNEY: Sales of new homes in Australia rose only slightly in November as gains for detached houses were offset by a lack of finance for multi-unit projects, an industry survey showed on Jan 5.

The Housing Industry Association (HIA) said sales rose 0.3% in November, following a 6% drop in October. Sales of detached houses increased by 0.8% while unit sales dropped 4.9%.

"The multi-unit sector continues to look extremely weak as the medium/high density end of the sector faces an on-going lack of available credit," said HIA chief economist Harley Dale.

"This situation does not augur well for an easing in very tight rental market conditions over 2010."

Credit for apartment building has been tight ever since the global credit crisis began to bite in late 2008.

"Overall, leading indicators are pointing to a recovery in new residential construction in 2010," added Dale.

Approvals to build new homes have been particularly strong in recent months.

Yet Dale pointed to lingering obstacles to recovery, including costly planning delays, the re-emergence of land and skilled labour shortages, and rising interest rates.

The Reserve Bank of Australia (RBA) lifted rates three times in the past three months to reach 3.75%, easily amongst the highest in the developed world. -- Reuters