New home sales have risen by 77.6 per cent in June, up from a record low in May.
“(This is) off the back of the Government’s HomeBuilder program announced at the beginning of the month,” Housing Industry Association’s Chief Economist Tim Reardon explains.
“Without intervention, a significant contraction in the volume of work on the ground would have occurred in second half of 2020 leading to a contraction across the wider economy.
“Up to half a million jobs were at risk without government intervention.”
This upswing follows a disastrous few months. New home sales fell to the lowest point on record during March, then fell even further in the following two months.
However, Mr Reardon warns against interpreting this rebound as a sign that the sector is back to normal, noting it “does not fully offset the dismal results of the preceding three months”.
“Additional sales data from July and August will be necessary before drawing accurate estimates on the impact of HomeBuilder on employment in the sector,” he explains.
Sales in Western Australia improved the most, doubling during June.
Mr Reardon credits the state’s “exceptionally low base” coupled with the WA State Government’s ‘Building Bonus’ which can be combined with HomeBuilder to exceed over $50,000 in grants.
South Australia also enjoyed a steep rise, up by 157.1 per cent.
Victorian sales were up 47.8 per cent from May, Queensland rose 43.3 per cent, and NSW new home sales were up 12.6 per cent.
The cancellation rate nationally remains high, at 23 per cent, although not as dire as March, where one in three new home sales were cancelled.
“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,” Mr Reardon said.