New home sales hit 2.5 year high

Real Estate

New home sales hit a 2.5 year high last year - recording the quickest monthly pace of growth since the beginning of 2010. The Housing Industry Association’s (HIA) chief economist Harley Dale says, “The upward momentum evident in new home sales is a good sign for residential construction activity in 2014.” HIA’s New Home Sales report showed new home sales grew 7.5 per cent in November on the back of a 30.5 per cent lift in muti-units and a 3.6 per cent rise in detached house sales.
Real estate figures
In yet another sign of a housing recovery home loan demand increased more than expected at the end of 2013. The Australian Bureau of Statistics reports home loans granted rose 1.1 per cent to 52,912 in November against expectations for a 1 per cent rise. Total housing finance by value rose 1.7 per cent to $26.934 billion in the same period.
ABS building approvals figures fell more than expected in November but remain more than 20 per cent higher over the year to November. The ABS reports building approvals dropped 1.5 per cent to 16,396 in November, against expectations of a 1 per cent fall, but are up 22.2 per cent over the year to November 2013.
The ABS also reported lending figures for November which showed total lending finance has risen 23.1 per cent from a year earlier. In the housing sector the ABS reports housing finance for owner occupiers gained 1.9 per cent to $16.551 billion in November while home loans gained 18.8 per cent from a year earlier.
When considering what it all means CommSec research’s team noted there are signs confidence levels are lifting and the housing market is strengthening. As a result CommSec says the Reserve Bank of Australia (RBA) has retired to the sidelines is not expected to change in policy settings in the next few months. 
FNN spoke to AMP Limited’s (ASX:AMP) AMP Capital Investors Head of Investment Strategy and Chief Economist, Dr Shane Oliver, who also affirmed the RBA will hold its fire in the short term:
“I think the Reserve Bank will leave interest rates right on hold through the course of the year with possible a rate hike or two towards the end of the year. So, by the end of the year we’re looking at the cash rate maybe around 3 per cent. So, on hold – 2.5 per cent for the bulk of the year, then a rise as we come to the end of the year.”  
To watch more of the interview click here:
Commercial property sector
REA Group Limited (ASX:REA) has announced the acquisition of online tenants application service 1Form Online Pty Ltd. The online real estate advertiser will pay $15 million to buy the business as part of its strategy to connect its customers with property-related services.
Mortgage Choice Limited (ASX:MOC) has spruiked an aggressive recruitment plan and outlined plans to launch a new incentive for franchisees. The mortgage broking company plans to recruit 100 new loans consultants this year and will introduce a monetary incentive for franchisees to bring a new loans consultant into their business.
DEXUS Property Group (ASX:DXS) looks to be the front-runner in the battle for Commonwealth Property Office Fund (ASX:CPA) after rival suitor GPT Group (ASX:GPT) ruled out making a sweetened bid. DEXUS’ joint bid with Canada Pension Plan Investment Board has already scored the backing of independent directors acting on behalf of Commonwealth Property Office Fund.