“New Home Sales reached remarkable heights in December (2020), nearly doubling compared to the number of sales recorded in November (2020),” stated HIA’s Economist, Angela Lillicrap.
The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.
“This is the second strongest month of New Home Sales in the 20 year history of the survey, only exceeded by March 2001,” added Ms Lillicrap.
“This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the 31 December 2020 deadline to access the $25,000 grant.
“The extension of the timeframe to commence building from three months to six, which was announced in November (2020), played a significant role in December (2020)’s results.
“New Home Sales in 2020 increased by 32.5 per cent compared to 2019. This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy.
“It is not expected that this remarkable volume of sales will continue into January (2021). The extension of HomeBuilder to allow contracts to be signed before March 2021 with a grant of $15,000 will support the sales of new homes into 2021, but not at this elevated level.
“Low interest rates, improved lending assessment and growth in the price of established homes will also support demand for new homes in 2021.
“The monthly increase in sales has been broad-based across the states with the exception of Western Australia which declined by 9.5 per cent.
“Western Australia has been the strongest performing state since the announcement of HomeBuilder and the state government’s Build Bonus grant in June (2020). Despite the underperformance relative to other jurisdictions, the December results are still elevated compared to previous years, with sales in the December 2020 quarter double the same time last year.
“The strength of New Home Sales is a positive sign that home building will support jobs on the ground throughout 2021,” concluded Ms Lillicrap.
Across the country, new home sales in the December (2020) quarter were higher in all regions when compared with the same period in 2019: South Australia (188.3 per cent), Victoria (103.1 per cent), Queensland (99.9 per cent), Western Australia (99.2 per cent), and New South Wales (61.7 per cent).