![ScreenHunter_01 Mar. 03 22.48](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_01-Mar.-03-22.48.gif)
Yesterday’s new home sales release from the Housing Industry Association (HIA) provided more encouraging news, with new home sales rising for the fourth month in a row, albeit from highly depressed levels.
Following last month’s 1.6% increase, new home sales nationally rose by a further 3.4% in June, with detached house sales increasing by 7.3%, partly offset by a 17.5% decline in unit sales. Total new home sales are now in a mild uptrend, having risen by 27% since sales bottomed in September 2012, driven primarily by a surge in detached house sales (see next chart).
![ScreenHunter_125 Aug. 02 07.39](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_125-Aug.-02-07.39.gif)
While the recovery is promising, it needs to be kept in perspective, with annual new home sales tracking only marginally (3.3%) above the 16-year lows recorded in December 2012 (see next chart).
![ScreenHunter_126 Aug. 02 07.43](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_126-Aug.-02-07.43.gif)
Importantly, the employment-sensitive detached house segment looks to have bottomed everywhere except Queensland, although it remains weak overall (see next chart).
![ScreenHunter_127 Aug. 02 07.45](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_127-Aug.-02-07.45.gif)
First home buyer incentives introduced in New South Wales and Queensland in October 2012 have had mixed results. While new house sales are 70% higher than September in New South Wales, they have fallen by 16% in Queensland (see below charts).
![ScreenHunter_128 Aug. 02 07.58](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_128-Aug.-02-07.58.gif)
![ScreenHunter_129 Aug. 02 07.58](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_129-Aug.-02-07.58.gif)
Victoria is also an interesting case. While the First Home Buyers’ Grant on pre-existing dwellings did not expire until 30 June 2013, detached house sales have surged, which seems counter-intuitive (one would expect sales to surge after the changes took effect, rather than before). In any event, it augers well for the effects of the grant in Victoria:
![ScreenHunter_130 Aug. 02 08.05](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_130-Aug.-02-08.05.gif)
Finally, the below charts track new detached house sales, approvals, completions and commencements across Australia. The Data is presented on a 4 quarter moving-average (4QMA) basis to smooth volatility.
First, the below chart shows housing construction recovering across the mainland, albeit from a low base:
![ScreenHunter_131 Aug. 02 08.09](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_131-Aug.-02-08.09.gif)
New South Wales is clearly recovering from incredibly weak levels:
![ScreenHunter_132 Aug. 02 08.11](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_132-Aug.-02-08.11.gif)
Victoria has bottomed, but has a long way to go to return to its former glory:
![ScreenHunter_133 Aug. 02 08.12](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_133-Aug.-02-08.12.gif)
The construction outlook in Queensland is weak:
![ScreenHunter_134 Aug. 02 08.14](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_134-Aug.-02-08.14.gif)
House construction in Western Australia is strong:
![ScreenHunter_135 Aug. 02 08.15](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_135-Aug.-02-08.15.gif)
South Australia also looks to have bottomed from depressed levels:
![ScreenHunter_136 Aug. 02 08.16](https://www.macrobusiness.com.au/wp-content/uploads/2013/08/ScreenHunter_136-Aug.-02-08.16.gif)
So overall, there’s some encouraging signs. But there’s a long way to go before home construction is out of the woods and acting as a meaningful replacement to the mining investment boom.