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The HomeBuilder scheme continues to drive activity in the sales market, with new home sales increasing by 1.7% annually in February, according to the latest report from the Housing Industry Association (HIA)
On a quarterly basis, the annual gain is more significant at 60.5%. This strong turnout was still due to the significant impact of the HomeBuilder scheme in the demand for detached housing.
Of all states, South Australia reported the highest sales, growing by 149.7%. Victoria and Queensland followed, with respective sales increases of 69.1% and 60.4%. New South Wales (46.2%) and Western Australia (25.1%) also reported strong annual sales over the same period.
“HomeBuilder was the catalyst for improving consumer confidence in the housing market. A surge in sales was observed following the announcement of HomeBuilder in June 2020, which lead to strong sales through to the end of 2020," said Angela Lillicrap, economist at the HIA.
Sales activity at the end of 2020 almost hit a new record volume as households rushed to finalise their contracts to build a home prior to the initial deadline of the scheme.
The extension of the scheme until the end of this month is expected to further boost sales, albeit not as strong as the surge reported in December. This is due to the lowering of the value of the grant at $15,000.
Still, Lillicrap said overall sales activity this month is likely to remain elevated due to other factors.
“Record low interest rates and rising house prices are sustaining market confidence into 2021. This strong level of consumer confidence combined with the demographic shift to regional areas is driving ongoing demand for new detached homes," she said.
