“The full impact of HomeBuilder is now evident in the HIA’s New Home Sales Report”, according to Housing Industry Association Chief Economist, Tim Reardon.
The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – has shown that sales in the seven months from March are now 11.8 per cent higher than at the same time last year.
“HomeBuilder was designed as a short and sharp consumer incentive to shore-up the number of new homes commencing construction in the December and March quarters,” explains Mr Reardon.
“HomeBuilder has been successful in providing consumer confidence for those customers that had delayed a major investment decision earlier in the year.
“The program has also brought buyers into the market that would otherwise not have been able to purchase their first home for a number of years.”
Mr Reardon notes that this increase will support the construction of detached homes, and “pull the rest of the economy forward into 2021”.
The positive impact of HomeBuilder has varied across the states, with Western Australia by far the biggest beneficiary.
New home sales in WA during the seven months since March are 95.7 per cent higher than at the same time in 2019.
Queensland (+7.1 per cent) and New South Wales (+3.3 per cent) have increased, South Australia has remained steady (+0.5 per cent), while Victoria is understandably down by 10.8 per cent.
“Sales in Victoria were surprisingly strong considering Stage 4 restrictions were still in place,” Mr Reardon said.
“This result likely reflects contract negotiations that commenced before restrictions came into effect.
“Sales in New South Wales continued their slow and steady rise with a 9.7 per cent increase in the September quarter compared to the June quarter. This leaves sales in NSW consistent with levels in 2019.
“With the program ending on 31 December for eligible sales, there is a very limited window of opportunity for prospective HomeBuilder customers to purchase a new home.
“Delays in the processing of new home loan applications is the most significant constraint to getting these new building projects under construction. Processing times for new home loans remains at around two months.
“Access to finance for new home construction has become exceptionally tight following new regulations introduced in recent years,” Mr Reardon concluded.