New homes sales improving

Last year's interest rate cute has had a significant impact on the new home building sector, according to a new survey.

The Housing Industry Association (HIA) report - carried out in conjunction with building products manufacturer Jeld-Wen - recorded a 6.8 per cent increase in new homes sales in November.

Based on results from Australia's 100 largest builders, sales of detached homes also increased - up by 9.8 per cent.

HIA chief economist Harley Dale welcomed the news, but also encouraged further financial intervention.

"With falling interest rates, a competitive building market, and a greater availability of skilled trades amidst still very soft overall demand conditions, now is clearly a good time to build a new home for those who are financially set to take that decision," Dr Dale said.

"Interest rate cuts, both those we've had and those that are still warranted, provide a starting catalyst for a sustained and strong recovery in new home building conditions. Such a recovery won't emerge, however, without well-targeted government stimulus and without a re-engagement of the policy reform process to reduce the high and inefficient barriers to new housing supply," he added.