New home sales have remained elevated despite the continued challenges of 2020, with sales now 11.8% higher in the seven months since restrictions came into effect than at the same time last year, according to the Housing Industry Association (HIA) New Home Sales report.
HIA chief economist Tim Reardon believes the HomeBuilder initiative has played a huge part in sustaining that activity.
“HomeBuilder has been successful in providing consumer confidence for those customers that had delayed a major investment decision earlier in the year,” he said.
“The program has also brought buyers into the market that would otherwise not been able to purchase their first home for a number of years.
“This increase in sales will support the construction of detached homes in the wake of the COVID recession and pull the rest of the economy forward into 2021.”
The positive impact of HomeBuilder has varied across the states. Over the seven months to September, sales have increased in Western Australia by 95.7% compared to the same time last year. Queensland (+7.1%) and New South Wales (+3.3 per cent) have also increased. South Australia has remained steady (+0.5%), while Victoria is down by 10.8%.
“Despite a fall in sales in Western Australia in the month of September, new home sales in the seven months since March are almost 100% higher than at the same time in 2019. This should see an increase in new home building to levels last experienced a few years ago, but not back to the boom levels of 2014,” said Reardon.
“South Australia is also seeing significant new investment coming into the pipeline and a very strong start to 2021.
“Sales in New South Wales continued their slow and steady rise with a 9.7% increase in the September quarter compared to the June quarter. This leaves sales in NSW consistent with levels in 2019.
“Sales in Victoria were surprisingly strong considering stage 4 restrictions were still in place. This result likely reflects contract negotiations that commenced before restrictions came into effect.”