New home sales jump

Last month's one per cent rate cut and the government's tripling of the First Home Owners Grant in mid-October has hit the mark as new house sales leaped 6.7 per cent in October.

Victoria and Queensland saw the biggest impact where new house sales jumped more than 20 per cent in October.

The result saw an increase in new home sales among Australia’s largest builders and developers for the first time since June.

Activity in the multi-unit sector failed to spark, with sales down by more than 8 per cent, indicating that investors remain on the sidelines.

HIA’s New Home Sales Report showed a 4.5 per cent increase in total sales volumes in October 2008.

Detached house sales increased by 6.7 per cent and were responsible for the aggregate lift in sales. Multi-units sales dropped by 8.6 per cent in October and have now only risen in three out of the last ten months.

HIA Chief Economist, Harley Dale, hoped that an improvement in new home sales in October could mark the beginning of a stabilisation, however he warned “it will be a long road back”.