A housing association has welcomed the 77.6% rise in new home sales over the month of June, but has also cautioned against relaxing into premature relief over the state of the housing market.
Housing Industry Association (HIA) chief economist Tim Reardon emphasised the substantial rise followed from a "record low result in May”.
“The rebound in new home sales in June does not fully offset the dismal results of the preceding three months and we are cautious of over interpreting data from a single month,” he said.
“New home sales fell to their lowest level on record in March and continued to fall in April and May. Without intervention, a significant contraction in the volume of work on the ground would have occurred in second half of 2020 leading to a contraction across the wider economy.
“[But] the government’s announcement of the HomeBuilder program has seen confidence in the market improve.”
According to Reardon, additional sales data from July and August will be necessary to draw “accurate estimates” on the full impact of the government's initiative.
“The improvement in June can be seen across all the states which is a good indication that the HomeBuilder program is working, to varying degrees in each jurisdiction,” he said.
“Western Australia experienced the largest improvement with sales more than doubling during the month of June, albeit from an exceptionally low base.
“This is not surprising given the State Government’s ‘Building Bonus’ program, which if combined with the first home buyer scheme can provide support exceeding $50,000.”
However, the percentage of sales cancelled during the month remained high at 23% which indicates many households are still deciding not to proceed with their new home purchases given the changed economic conditions.
Across the country, Western Australia had the largest monthly increase in June compared to May 2020, rising by 211.2%. It was followed by South Australia (+157.1%), Victoria (+47.8%), Queensland (+43.3%) and New South Wales (+12.6%).
