New home sales jump

The RBA's 1% October rate cut and the government tripling of the first home owners grant in mid-October has hit the mark, as new house sales leaped 6.7% in October 2008.

Victoria and Queensland saw the biggest impact where new house sales jumped more than 20% in October 2008.

The result saw an increase in new home sales among Australia’s largest builders and developers for the first time since June 2008.

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

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

Detached house sales increased by 6.7% and were responsible for the aggregate lift in sales. Multi-units sales dropped by 8.6% 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”.