New home sales soared to a new high in August, as a wave of first home buyers rushed into the market.

The national tally rose sharply - despite a sharp fall in sales in NSW, where the economy continues to struggle.

Nationally, the volume of new houses jumped 11.4 per cent in August, from a 0.1 per cent rise in July, the Housing Industry Association said, as first time buyers hurried to take advantage of the Federal Government's $21,000 first-home buyer grant boost before it is reduced at the end of the month.

August's result is the highest in the three-and-a-half year history of the HIA monthly survey, according to data from Bloomberg.

"The boost to new home construction from the tripling of the First Home Owner Grant for new dwellings will be apparent throughout the second half of 2009 and well into 2010," said HIA chief economist Harley Dale.

The number of stand-alone house sales rose by 11.8 per cent while the number of apartments sold increased by 7.5 per cent.

Victoria posted the biggest gain, with house sales rising by 21.8 per cent, followed by Queensland where they jumped 20.9 per cent.

In Western Australia house sales gained 15.1 per cent. In NSW, they dropped by 11.3 per cent, amid a slumping state economy.

New house sales in South Australia also declined 2.5 per cent, HIA said. The Federal Government doubled the First Home Owners' grant to $14,000 for existing homes and $21,000 for new properties in October as it responded to the threat posed by the global financial crisis.

The grant is due to be reduced to $10,500 and $14,000 respectively after October 1, before being scaled back to $7000 for both at the end of the year.

''As the expiry approaches, we expect another home sales boom in Sept, but quite likely to be followed by a collapse in the fourth quarter,'' said TD securities economist Annette Beacher.

''A good reason for the RBA to remain on hold for a few more months at least to assess the real economics trends evident underlying this fiscal policy-led volatility.''

Earlier this week, mortgage broker Loan Market Group told AAP there had been no last minute rush by first-time home buyers before the reduction in the grant boost.

Loan Market Group had said mortgage inquiries from first-time buyers had fallen back from their mid-year peak.

Sourcee: Fairfax