After cautioning against prematurely attributing the rise in new home sales over June to HomeBuilder, a building association has now directly celebrated the positive impact of the government’s initiative.
“With two months of data since the introduction of the Australian government’s HomeBuilder scheme, it is increasingly clear that HomeBuilder has arrested the decline in New Home Sales and will protect jobs in the sector into 2021,” said Housing Industry Association (HIA) chief economist Tim Reardon.
Reardon acknowledged housing data has been “ricocheting through” the COVID-19 period, but highlighted its performance over the last two months.
“New home sales are highly reactive to changes in consumer confidence, and [they] collapsed in the three months to May 2020,” he explained.
“The announcement of HomeBuilder, together with the easing of restrictions across most jurisdictions, has seen confidence in the market improve. In the two months since June, new home sales have increased to be 64.4% higher than the preceding two months.”
However, the HIA remains anxious to see the sales data from August to get further insight into the market’s trajectory, as each region seems to be responding to current events differently.
“The strength of new home sales is not consistent across all jurisdictions. Western Australia has seen an exceptional bounce in sales due in part to the addition of the State government’s building bonus,” said Reardon.
“Sales in New South Wales were already slow at the start of 2020 and fell away dramatically in March. NSW sales in June and July 2020 are only 9.6% higher than the previous two months and remain lower than levels prior to the pandemic.
“The Victorian market has remained resilient despite the state’s COVID-19 challenges and the re-introduction of restrictions during July. The data, however, pre-dates the introduction of stage four restrictions which occurred at the beginning of August.”
The association expects new home sales to settle to a more sustainable level in the coming months.
Over the two months since HomeBuilder was introduced, new home sales have increased in Western Australia by +170.6%, South Australia by +142.1%, Queensland +42.%, Victoria +39.5% and New South Wales +9.6%.
