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AU market shows signs of recovery

Property Here - Wednesday, July 10, 2013

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AUSTRALIA'S property market is showing signs of recovery after recording a slight increase in new home sales in May.

New home sales climbed 1.6 percent for the month, with detached house sales up 0.9 percent, according to the Housing Industry Association (HIA).

But the market is still faced with tight residential supply leading to fears the country could experience 
adverse social consequences.

Speaking at the organisation's Building Better Cities Summit HIA chief executive Graham Wolfe said Australia needed to build another 1.3 million homes by 2020 if current population projections were to be met.

"At the current rate of building we will fall 150,000 homes short," Wolfe said.

"Failure at all levels of government over a number of years to address the fundamental constraints to housing supply has seen residential construction experiencing its longest trend decline in post war history."

HIA Chief economist Dr Harley Dale said positive news like the 5.7 percent increase in multi-unit sales in May would lead to nothing if authorities continued to wait for lower mortgage rates to turn things around.

Wolfe said providing access to finance for developers was vital to addressing supply issues. 

He said the housing sector would welcome moves being considered by the Australian Government which would give incentives to states for meeting housing targets.