The Housing Industry Association’s (HIA) latest data has revealed that in the two months since June, new home sales jumped by 64.4 per cent from the preceding two months.
HIA chief economist Tim Reardon said he is cautious about over-interpreting the data from only two months but reiterated that the data collected thus far has clearly indicated that the federal government’s HomeBuilder package will assist with protecting jobs in the sector in the second half of 2020 and into 2021.
However, he said additional sales data in August will be required before drawing concrete conclusions.
“Housing data has been ricocheting through the COVID-19 period,” Mr Reardon said.
“New home sales are highly reactive to changes in consumer confidence and collapsed in the three months to May 2020. The announcement of HomeBuilder, together with the easing of restrictions across most jurisdictions has seen confidence in the market improve.”
The rate of sales is not consistent across the country. Western Australia has seen a higher jump in sales compared to other parts of the country in part due to the addition of the state government’s building bonus.
In NSW, sales in June and July 2020 were only 9.2 per cent higher than the previous two months and have remained lower than levels prior to the pandemic.
“Sales in NSW were already slow at the start of 2020 and fell away dramatically in March,” Mr Reardon said.
Victorian sales increased by 1.5 per cent in July compared with June, followed by Queensland, which increased by 1.3 per cent.
“The Victorian market has remained resilient despite the state’s COVID-19 challenges and the re-introduction of restrictions during July,” Mr Reardon said.
“The data, however, pre-dates the introduction of stage 4 restrictions, which occurred at the beginning of August.”
South Australia declined by 8.1 per cent, while NSW and Western Australia declined by 8.9 per cent and 27.8 per cent, respectively.
However, since the introduction of HomeBuilder, sales in Western Australia have increased by 170.6 per cent, while sales in South Australia increased by 142.1 per cent, and Victoria posted a 39.5 per cent increase.
Queensland increased by 42.4 per cent, while NSW increased by 9.6 per cent during this period.
‘HomeBuilder is doing exactly what it was intended to do’: Sukkar
Commenting on the data released by the HIA, federal Assistant Treasurer Michael Sukkar said the HomeBuilder scheme is achieving its objective of protecting tradies’ jobs and creating jobs in the construction industry during the COVID-19 crisis.
“In the two months since June, Australia’s major builders have reported that new home sales have increased by more than 64 per cent over the preceding two months,” Mr Sukkar said.
“HomeBuilder was designed to encourage those who may have understandably pulled back from undertaking a new build, or substantial rebuild, in March when the COVID-19 pandemic hit, to enter the market.
“The latest HIA data shows HomeBuilder is doing exactly what it was intended to do by generating immediate construction activity that will engage tradies straightaway.”
The $688-million HomeBuilder scheme provides a $25,000 grant to owner-occupiers “substantially renovating” or building a new home from 4 June to 31 December 2020.
A national price cap of $750,000 has been set for new home builds, while a renovation price range of $150,000 to $750,000 has been set for renovating an existing home with a current value of no more than $1.5 million.
The federal government recently reached an agreement with all states and territories to administer its scheme, with all states and territories becoming signatories to the HomeBuilder National Partnership.
[Related: HomeBuilder sparks surge in home sales]
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.