Detached housing ‘reaching a decade high’

The Housing Industry Association’s (HIA) New Home Sales report for November 2020 shows that new home sales increased by 15 per cent last month, to just over 7,000 new homes. 

The report reveals notable increases in Victoria, rising to 20.6 per cent as it emerged from stage 4 restrictions, and a 15.9 per cent increase in NSW.

New decade high

Moreover, the report shows that in the last three months to November, sales were 41.1 per cent higher than the same time last year, “reaching a decade high”, according to HIA’s economist, Angela Lillicrap.

The HIA New Homes Sales report, a monthly survey of the largest home builders in the five largest states, can provide an indication of future detached home construction.

The most recent report shows that new home sales in the last three months to November 2020 were higher in the five main states, when compared with the same period in 2019.

Western Australia doubled its volumes (108.8 per cent), South Australia grew by half (57.6 per cent), Queensland was up by a third (34.0 per cent), while Victoria and NSW were up by a fifth (22.2 per cent and 20.7 per cent, respectively).

Ms Lillicrap added that this data precedes the extension of HomeBuilder, which was announced on 29 November 2020, which “should see strong sales of new homes reach into 2021.”

“HomeBuilder is not the only reason for the strength in new home sales, although it was the trigger for improved market confidence. Low interest rates, house price growth and a change in consumer preferences away from apartment-style living have all seen demand for detached housing rise. Many households have diverted their expenditure from travel and entertainment towards housing, including renovating their home.”

“The strength of new home sales is a positive sign that home building will support the broader economy as we enter 2021,” Ms Lillicrap concluded.

The figures have been welcomed by Assistant Treasurer Michael Sukkar, who commented: “HomeBuilder is continuing to deliver on its objective of generating residential construction demand to protect tradies’ jobs and drive our comeback from the COVID-19 recession…

“The construction industry has said the extension of HomeBuilder will mean a steady pipeline of construction activity through to 2022, which will keep tradies on the tools.”

[Related: Detached housing approvals boom]