Sales of detached houses increased by 7% and sales of multi-units were up 16.3%, according to the new home sales report from the Housing Industry Association which covers the country’s largest volume builders.

The data also shows that new home sales increased by 2.8% in the first quarter of the year but were 1.7% lower than the same quarter in 2015.

It is another positive update for the residential construction sector, according to HIA economist Diwa Hopkins and she pointed out that the bounce in March has moderated the downward trend that emerged in the second half of 2015.

‘The current level and trajectory of new home sales and approvals provides a strong signal that new home building activity in 2016 will remain strong,’ she added.

She also pointed out that a cut to the official cash rate will also provide additional support to the residential construction sector.

A breakdown of the figures show that detached house sales increased in four of the five mainland states, up 13.2% in Queensland, up 9.8% in Western Australia, up 8.3% in New South Wales , up 2.8% in Victoria but down 6.9% in South Australia .

Quarter on quarter detached house sales were up 11.2% in Victoria, up 5.8% in Western Australia and up 4.3% in Queensland. Sales declined over this period by 4% in New South Wales and down 5.7% in South Australia.

Meanwhile, in an encouraging update for the new home building industry, data from the Australian Bureau of Statistics (ABS) shows that a total of 19,371 homes were approved for construction in March this year, some 3.7% more than in February.

Approvals rose for both multi-unit and detached homes, increasing by 2.4% and 5.1% respectively. Hopkins pointed out that despite the increase during March, the broader trend in approvals is that of decline from the record levels during the middle of last year.

During the March 2016 quarter, the number of approvals was lower than in the previous quarter, by 1.6% and also 8.8% lower than 12 months previously.

The HIA expects that the number of new homes commencing construction during 2016 to remain very strong at around 200,000, albeit less than 2015’s record of 220,000.

A breakdown of the figures shows that during March total seasonally adjusted new home building approvals saw the largest increase in South Australia with a rise of 8.7%, were up 7.3% in Western Australia, up 6.9% in New South Wales, up 5.7% in Queensland and up 3.7% in Victoria but fell by 18.7% in Tasmania.

In trend terms, approvals saw a 19% increase in the Australian Capital Territory and an 18.4% fall in the Northern Territory.

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