HomeBuilder has arrested the decline in new home sales and will protect jobs in the sector into 2021, according to the HIA. HIA Chief Economist, Tim Reardon said housing data had been ricocheting through the COVID-19 period. Source: Timberbiz
HomeBuilder is a time-limited, tax-free grant program to help the residential construction market to get through the Coronavirus pandemic. It provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home.
“New Home Sales is highly reactive to changes in consumer confidence and collapsed in the three months to May 2020. The announcement of HomeBuilder, together with the easing of restrictions across most jurisdictions, has seen confidence in the market improve,” he said.
In the two months since June, New Home Sales have increased to be 64.4% higher than the preceding two months.
“While we are cautious of over interpreting data from only two months, this is a clear indication that HomeBuilder will help protect jobs in the sector in the second half of 2020 and into 2021,” Mr Reardon said.
He additional sales data in August would be required before drawing accurate conclusions.
“The strength of New Home Sales is not consistent across all jurisdictions. Western Australia has seen an exceptional bounce in sales due in part to the addition of the State government’s building bonus.
“Sales in New South Wales were already slow at the start of 2020 and fell away dramatically in March. NSW sales in June and July 2020 are only 9.6% higher than the previous two months and remain lower than levels prior to the pandemic.
“The Victorian market has remained resilient despite the state’s COVID-19 challenges and the re-introduction of restrictions during July. The data, however, pre-dates the introduction of stage four restrictions which occurred at the beginning of August.
“Nationally, we expect that New Home Sales will settle in the coming months to a more sustainable level but the number of new homes commencing construction will continue to slow for at least the next 12 months.”
Across the country, Victoria increased by 1.5% in July compared to June 2020, followed by Queensland which increased by 1.3%. South Australia (-8.1%), New South Wales (-8.9%) and Western Australia (-27.8%) all declined during the month.
Over the two months since HomeBuilder, sales have increased in Western Australia by 170.6% followed by South Australia with an increase of 142.1%. Queensland (+42.4%), Victoria (+39.5%) and New South Wales (+9.6%) also increased during this period.
