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A report on Hotspotting.com.au quoting ANZ Bank chief economist Warren Hogan says the housing market is in the early stages of a solid cyclical upswing, buoyed by low interest rates, but it’s not a bubble. “Our view is that prices remain largely explained by low interest rates, sharply improved affordability, the release of pent-up sales demand created over recent years and an unprecedented (and increasing) shortage of physical housing stock,” Hogan writes. He says the majority of future price gains will be in Sydney, Perth and Melbourne, with investors driving the upturn in the market. Meanwhile, annual new home sales have risen in annual terms for the first time since 2008. The Housing Industry Association’s latest monthly report shows that new home sales rose 14.4% over 2013. Sales of new detached houses rose 0.9% in December, continuing last year’s positive trend. New home sales were about 25% higher in the December Quarter 2013 than they were in the equivalent period in 2012. There was slow growth, however, in the owner-occupied market for the 12 months to December 2013. Housing finance figures released by the ABS show the lowest monthly increase in owner-occupied finance commitments since December 2012. Peter Bushby, President of the Real Estate Institute of Australia, said the figure highlighted the need for the Government to act on housing affordability and to stem the decline in the number of first home buyers.