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The number of successful sales for new homes is expected to surge again in March as buyers try to take advantage of the HomeBuilder scheme before the deadline of its extension, according to the Housing Industry Association (HIA).
The scheme was extended beyond its original deadline to March. However, the grant has been lowered to $15,000.
"The March surge will not be of the same quantum as December due to the lower grant offering," said Tim Reardon, chief economist at the HIA.
Also read: What to know about the HomeBuilder Scheme
There was a substantial surge in the demand for new homes over the December quarter as buyers finalised their contracts before the deadline.
Home sales during the month increased by 91.8%. This is the second strongest month for new homes in the 20-year history of the HIA sales report, behind only the level of sales activity recorded in March 2001. In terms of annual growth, new home sales increased by 32.5%.
"As a consequence of HomeBuilder drawing forward sales in December, new home sales in January 2021 were just 30% of the number of sales achieved in December 2020," Reardon said.
On an annual basis, January sales were 12.1% lower than during the same time last year, Still, Reardon said the results are still relatively robust, given that January is a slow month for sales.
“The relative strength of sales in January is encouraging and indicates that there will remain ongoing demand for new homes beyond the HomeBuilder scheme," he said.
Reardon said several factors are likely to continue boosting new home sales over the year after the HomeBuilder ends, albeit at a level that is not as strong as last year's.
"Low interest rates, rising house prices and a demographic shift in demand towards detached housing and regional areas should ensure ongoing demand for new homes," he said.
