Australia’s housing boom is continuing apace, especially in the First Home Buyer segment, according to a new report released by the Housing Industry Association.
New home sales were up more than a third on the same levels this time last year, with single detached homes fuelling construction across the country. South Australia in particular posted notable results on 2020, with 90.6% more sales than last year.
“The strength of New Home Sales indicates a strong level of building activity will occur in 2021 and into 2022,” said Angela Lillicrap, Economist at the Housing Industry Association. “This will provide employment across a range of industries, not just the construction sector.”
The HIA’s New Home Sales report put the growth in construction down to a combination of record low interest rates, which allow potential buyers to make their first steps onto the property ladder, as well as migration patterns that have seen many inner city renters able to move into more suburban and regional areas as CBD workplaces are increasingly allowing staff to work from home.
“Demographic shifts in population towards regional areas will continue to drive demand for new detached homes,” added Lillicrap. “Strong house price growth recently has also sparked FOMO in buyers which will also support the industry.”
A third factor was the HomeBuilder grant, which was still in effect when the data for the report was collected in March 2021. That had previously allowed many First Home Buyers to build new homes, provoking a wider uptick in economic activity as construction firms reported more business. With that no longer a factor in the market, experts like Angela Lillicrap are now predicting a slowing up of Australia’s housing boom in the next few months.
“HomeBuilder has brought forward demand for new homes,” she said. “As a consequence, sales over the coming months are expected to cool from recent highs.”
