Article by Michelle Leftwich
According to the Housing Industry Association’s June New Home Sales Report, new home sales recorded the first monthly increase since COVID-19 restrictions were introduced in March. More impressive was the fact that these numbers were also the highest result recorded in nearly a decade.
HomeBuilder a key driver
This record in new home sales across the nation unsurprisingly coincided with the launch of the Morrison Government’s HomeBuilder grant. The grant, which is being offered until December 31, provides eligible applicants $25K to put towards building a new home (including off-the-plan properties such as apartments) or renovating their existing property.
Sales were also likely buoyed by state-government incentives introduced around the same time, many of which were offered on top of the HomeBuilder grant. Read more about the range of HomeBuilder and Home Buyer schemes and concessions currently available in each state in Australia.
Does this spike indicate a market in recovery?
While positive about the record number of sales in June, the HIA is cautious about announcing a housing market turn-around just yet.
Additional sales data from July and August will be necessary before drawing accurate estimates on the impact of HomeBuilder on the housing sector.
What it does indicate is that the introduction of HomeBuilder did what it was intended to do. Stopping the fall of new home sales in June and returning a degree of consumer confidence.
Monthly increases by state:
3 Key Report takeaways:
New home sales in June were 77.6 percent higher compared with May.
This leaves New Home Sales in the four months since COVID-19 restrictions came into place, 4.2 percent lower than in the preceding four months.
The cancellation of new home projects has improved from its peak in April but remains elevated at 23 percent.