The Housing Industry Association (HIA) New Home Sales report for May 2021 has revealed that new home sales jumped by 15.2 per cent in May compared with April 2021, despite the end of the federal government’s HomeBuilder scheme.
This increase has followed a 54.4 per cent slump in new home sales in April 2021, compared with March 2021.
The increase was driven by Victoria, where new home sales rose by 45.3 per cent, followed by South Australia (16 per cent), and NSW, which recorded a modest 0.6 per cent rise in sales.
Western Australia was the only state to record a fall in sales (down 4.1 per cent), according to HIA data.
The report – which is a monthly survey of the largest volume home builders in the five largest states and provides an indication of future detached home construction – also revealed that in the two months since the end of the HomeBuilder package in March 2021, sales increased by 2.9 per cent compared with the same time in 2019.
The figures showed that NSW has driven the rise in the last two months more than any other state, with sales in April and May 36.9 per cent higher in the state than at the same time in 2019.
Across the other states, comparing April and May 2021 to the same months in 2019, Western Australia’s sales levels rose by 26 per cent, followed by Queensland (up 4 per cent).
However, sales levels fell in Victoria (down 16.1 per cent) and South Australia (down 14.2 per cent).
Commenting on the April and May sales figures, HIA economist Tom Devitt said: “This solid level of sales in April and May indicates ongoing demand for new detached homes, even in the absence of stimulus
“A record number of new homes are expected to commence construction in 2021. The low interest rates and confidence in the housing market are continuing to facilitate demand.”
Mr Devitt also spoke about the trends in NSW, stating: “New South Wales saw the smallest uptake of the HomeBuilder program, but is demonstrating the strongest demand following the end of the program.
“The strength of demand in New South Wales suggests that other states will also begin to demonstrate a solid demand for new homes as the impact of HomeBuilder fades.”
The scheme was extended in 2020 to provide a $15,000 grant for building contracts (new builds and substantial renovations) signed between 1 January 2021 and 31 March 2021 (inclusive).
The federal government recently extended the construction commencement requirement for the scheme from six months to 18 months for all existing applications.
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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.