The number of new homes sold around Australia has risen for the third month in a row, with February's increase underpinned by a rebound in the hard-hit NSW market.
Sales in NSW increased 16.9 per cent from a month earlier.
However, financial markets are speculating that the Reserve Bank could use the improved sales figures to raise rates again as early as next week, when it holds its next monthly meeting.
Other surveys released yesterday point to more rough patches for owners and renters.
A Fujitsu-JP Morgan Australian Mortgage Industry survey found almost a quarter of home owners had to trim spending to meet mortgage repayments after three interest rate rises last year.
And one of Australia's biggest rental agencies, RUN, also released anecdotal figures showing the pace of rental increases had doubled for Sydney and Melbourne in the past four months, compared with the previous four months.
RUN, which manages 20,000 rental properties, said rents on relet properties in the two cities rose 4 per cent or $53.50 for the four months to October, but this had accelerated to 8.62 per cent, or $109.27 higher, for the four months to February.
While bad news for renters, it is a sign of some health returning to the overall housing market, where low rent returns and falling prices had kept investors away.
Commentators yesterday said the outlook for the housing sector, particularly for first-home buyers and investors, would be dictated by interest rates.
JP Morgan chief economist Stephen Walters said that if rates did rise, it would worsen the market in depressed areas such as western Sydney and outer Melbourne, where three to four out of 10 house sales were forced.
"We are not forecasting a rates rise this year, but eight or nine other economists are going for a rate rise," he said.
Fujitsu/JP Morgan found that of the 1500 people surveyed who were thinking about buying a property for the first time, 30 per cent said they could not afford it. The figure is up from 17 per cent at the same time last year.
In contrast, rising interest rates would have little impact on upper to middle housing markets around the country. "If rates do rise, it is likely to be next month, otherwise we are into the May budget and an election later this year," Mr Walters said.
Housing Industry Association executive director Simon Tennent said that with housing affordability still low, further interest rate rises might stymie the recovery in new-home sales.
Sales of private detached houses rose 3.9 per cent in February, while sales of units fell 4.2 per cent, the association said.
Western Australia had the second-fastest rise in new-home sales, with an increase of 11.2 per cent, while sales in Queensland fell 3.4 per cent in February.
The overall sales volume last month was still 5.2 per cent lower than a year ago.
Source: The Australian
