Data published by REA Group has revealed that buyer appetite for new homes is increasing, with enquiry to developers jumping by 62.8 per cent in June, and land estate enquiries experiencing a 93 per cent boost over the month.
This surge followed on from a bullish 53.9 per cent increase in May, according to the new REA Insights New Homes Snapshot for July.
Apartment leads increased by 29.4 per cent, while enquiries for new retirement properties rose by only 4.3 per cent.
REA Group’s executive manager, economic research, Cameron Kusher, has suggested that the announcement of the federal government’s $688-million HomeBuilder package has led to a further increase in the already rising interest in new properties.
“I expect to continue seeing high levels of enquiry to developers as buyers look to capitalise on government incentives and historic-low borrowing costs that are currently available,” Mr Kusher said.
“It’s no surprise that land estate new development is benefiting from HomeBuilder, given the package is geared towards new builds. There are restrictions on construction time frames that inhibit apartment development, and the Australian dream is to own a house.”
Over the past two months, enquiries for land estates have risen by 222.2 per cent, apartment enquiries have risen by 79.1 per cent, and retirement enquiries have jumped by 107.1 per cent.
Nationally, there were a record number of developer enquiries in June, with Tasmania leading the capital cities where enquiries trebled to 203.5 per cent, while it doubled in Western Australia to 179.0 per cent. It almost doubled in Queensland to 97.2 per cent and South Australia to 98.8 per cent.
Mr Kusher said the increasing interest in home designs and builder profiles indicated that potential buyers are showing interest to choose a builder and design their new home but are yet to decide the location for their purchase.
Mr Kusher also believes the HomeBuilder scheme is good incentive for first home buyers as it provides an additional $25,000 on top of other grants and schemes that are available in all states and territories. Many of these are targeted at the new housing sector.
“Given this, I anticipate that HomeBuilder will be extremely attractive for first home buyers and is likely to pull forward purchase decisions from this buyer cohort,” he said.
“The challenge is likely to come once the first home buyer pull-forward is exhausted (there is only a finite supply of these buyers and incentives are only available until the end of 2020) and, assuming international borders remain closed, there are no replacement sources of demand for new homes in 2021.
“In the meantime, I expect that there will be ongoing elevated levels of enquiry to developers as buyers look to capitalise on these attractive incentives and historic-low borrowing costs.”
First home buyer activity increased by 28.5 per cent in June when looking at email enquiry on the realestate.com.au website. Mr Kusher partly attributed this spike to the HomeBuilder package announcement.
The website saw a month-on-month decline in page views for new developments in June, but the overall audience for all new property sections, including new home design and builder profiles, hit a record high.
[Related: REA launches new home buyer insights hub]
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.