RESIDENTIAL PROPERTY

Home sales rises after end of HomeBuilder

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NEW home sale are up 15.2% in May, the strong market conditions across the country push new constructions to record highs.

According to the HIA New Home Sales report, the sales in the two months immediately following the wrap up of the government’s HomeBuilder initiative are up 2.9% on the same period in 2019.

“This solid level of sales in April and May indicates ongoing demand for new detached homes, even in the absence of stimulus,” said HIA economist, Tom Devitt.

In May, the HIA reported that 2021 was set to become a record year for detached housing construction, the 12 months to September 2021 will mark a record of 146,000 detached houses commencing construction, over 20% higher than the previous peak in 2018.

However this boom in demand will be met with an undersupply in labour, materials and land.

“A record number of new homes are expected to commence construction in 2021. The low interest rates and confidence in the housing market are continuing to facilitate demand,” added Devitt.

Meanwhile, last week the NSW state government announced plans to invest $80 million into the New Berrima Brickworks facility, with the capacity to process 50 million standard bricks per annum, 15 million more bricks than the existing Bowral facility.

New South Wales reported the most significant results over the last two months, with sales over April and May up 36.9% on 2019 levels.

“New South Wales saw the smallest uptake of the HomeBuilder program, but is demonstrating the strongest demand following the end of the program,” said Devitt.

Western Australia followed this lead with a 26% increase, Queensland also saw an increase at 4.0%.

While in South Australia and Victoria there were drops of 14.2% and 16.1% respectively.

“The strength of demand in New South Wales suggests that other states will also begin to demonstrate a solid demand for new homes as the impact of HomeBuilder fades,” concluded Devitt.

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