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29 May 2013

Trend of Recovery in New Home SalesContinues in April 2013

The HIA New Home Sales Report for April 2013 shows the trend of recovery since late 2012 iscontinuing in 2013.

The HIA New Home Sales report, a survey of Australia's largest volume builders, showed that totalseasonally adjusted new home sales increased by 3.9 per cent in April 2013, taking monthly sales backto a level not seen in over a year. The headline result was driven by a 6.7 per cent lift in detached housesales, which was experienced across all states covered by the survey, bar Queensland. In contrast,

multi-unit sales fell by 9.4 per cent.

Overall, recent developments in new home sales are encouraging. In particular, the importantdetached house segment of the market continues to climb out recent record lows, and this improvementhas largely been broad-based across the states, said HIA Senior Economist, Shane Garrett.

While multi-unit sales have softened over recent months, the gains made over the course of 2012 havenot been eroded. A broader look at the situation shows that the volume of sales in the three months to

April this year is still 51.7 higher than trough experienced a year earlier, added Shane Garrett.

We do, however, need to be considering the longer term prospects of a recovery in residentialconstruction beyond 2013, said Shane Garrett.

The economy is amidst a transition away from growth driven by mining and related investment and theconsensus aspiration is for residential dwelling investment to fill the ensuing hold. While we share thisaspiration, we dont have strong evidence that this will actually be achieved, said Shane Garret.

There are still major obstacles to recent improvements in residential construction developing into asustained recovery. Households remain cautious and are still using lower interest rates to hasten debtrepayment rather than engage in spending. On the other side of the housing ledger, home builders andresidential developers are facing tight credit conditions, hampering the number of projects that proceedto sale and building commencement, said Shane Garrett.

For a recovery to be of the duration and magnitude required not only by the economy, but by Australiashousing needs, governments of all levels, led by the federal government, need to take decisive policyaction to address these obstacles, said Shane Garrett.

In the month of April 2013 detached house sales increased by 9.1 per cent in Victoria, 9.0 per cent inWestern Australia, 8.1 per cent in New South Wales, and 2.7 per cent in South Australia. Detachedhouse sales fell by 1.8 per cent in Queensland.

For further information please contact:Shane Garrett, Senior Economist 0416 633 261Diwa Hopkins, Economist 6245 1355

EMBARGOED UNTIL 11.00 AM EASTERN DAYLIGHT TIME

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Apr-13

HIA New Home Sales (LHS) ABS Seasonally Adjusted Approvals - Private Sector (RHS)

+3.9%

Source:

ABS8731

.0an

dHIA

PRIVATE NEW DWELLING SALES - AUSTRALIA (SEASONALLY ADJUSTED)