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New home sales recover in August

AAP logoAAP 30/09/2016 Garry Shilson-Josling, Economist

The latest bounce in new home sales is a bit like losing momentum on a trampoline while still maintaining an impressive height, the Housing Industry Association says.

Sales of new home sales bounced back by 6.1 per cent in August, but that only offset a little more than half the previous month's fall of "a rather hefty" 9.7 per cent.

The recovery took the level of sales from July's two-year low of 7,110 to 7,543, marginally below the previous year's average of 7,590, the seasonally adjusted figures show.

"There are certainly downside risks ahead - the national new home building market will slow and there are risks around property prices in key markets," the HIA said.

"That doesn't mean that recent negative headlines - which tend to generalise about housing market risk - need to generate an air of despair."

The HIA said Australia is experiencing the longest and biggest new home building cycle in its history and leading indicators pointed to levels of construction which will still be healthy even if they are below the record set in 2015/16.

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