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The changes in the timeline of the HomeBuilder grant have boosted new home sales activity over the last month of 2020, according to the latest figures from the Housing Industry Association (HIA).
Over the month, home sales 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%.
"This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy," said Angela Lillicrap, economist at HIA.
On a quarterly basis, the country's five states reported substantial increases in new home sales, with South Australia taking the top spot with 188.3% growth, followed by Victoria (103.1%), Queensland (99.9%), Western Australia (99.2%), and New South Wales (61.7%).
Lillicrap said the surge in sales is linked to the HomeBuilder scheme. Before the year ended, the federal government announced the extension of the timeframe, allowing the commencement of the building of dwellings from three months to six.
"This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the 31 December 2020 deadline to access the $25,000 grant," she said.
The further extension of HomeBuilder, which provides $15,000 grants for contracts signed before March, will continue to help support new home sales this year.
"This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy," she said.
However, Lillicrap made clear the "remarkable" volume of sales reported in December is not expected to continue with such velocity into January.
