The Housing Industry Association’s (HIA) latest data has revealed that new home sales rose 77.6 per cent in June following a record-low result in May.
Western Australia recorded the sharpest month-on-month increase (211.2 per cent), followed by South Australia (157.1 per cent), Victoria (47.8 per cent), Queensland (43.3 per cent) and NSW (12.6 per cent).
According to HIA chief economist Tim Reardon, the rebound in new home sales was a response to the rollout of the federal government’s HomeBuilder scheme, announced in early June.
“It is a clear indication that HomeBuilder will help protect jobs in the sector in the second half of 2020 and into 2021,” he said.
The HomeBuilder scheme provides eligible owner-occupiers “substantially renovating” or building a new home from 4 June to 31 December 2020 with a $25,000 grant.
The scheme was designed to breathe life into the residential property market, which faces a prolonged downturn off the back of the COVID-19 crisis.
The government has estimated that approximately 27,000 grants would be handed out as part of the package across $10 billion in building projects, supporting 140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector.
Mr Reardon noted that data form the months of July and August would need to be assessed before “drawing accurate estimates on the impact of HomeBuilder on employment”, but said a lack of stimulus would have led to a “significant contraction in the volume of work” in the residential construction sector, undermining the broader economic recovery.
“Up to half a million jobs were at risk without government intervention,” he said.
“The improvement in June can be seen across all the states, which is a good indication that the HomeBuilder program is working, to varying degrees in each jurisdiction.
“The government’s announcement of the HomeBuilder program has seen confidence in the market improve.”
The HIA economist concluded: “If the momentum from HomeBuilder continues, we will see more slabs poured before the end of the year, protecting jobs across the economy in manufacturing, retail and professional services.”