New home sales jump by 64%
New data has shown in the two months since June, new home sales have increased to be 64.4 per cent higher than the preceding two months.
“With two months of data since the introduction of the Australian government’s HomeBuilder scheme, it is increasingly clear that HomeBuilder has arrested the decline in new home sales and will protect jobs in the sector into 2021,” commented HIA chief economist Tim Reardon. “Housing data has been ricocheting through the COVID-19 period. New home sales is highly reactive to changes in consumer confidence and collapsed in the three months to May 2020. The announcement of HomeBuilder, together with the easing of restrictions across most jurisdictions, has seen confidence in the market improve.
“While we are cautious of over-interpreting data from only two months, this is a clear indication that HomeBuilder will help protect jobs in the sector in the second half of 2020 and into 2021. Additional sales data in August will be required before drawing accurate conclusions.” That all being said, Mr Reardon noted the strength of combined new home sales is not consistent across all jurisdictions. “Western Australia has seen an exceptional bounce in sales due in part to the addition of the state government’s building bonus,” Mr Reardon said.
“Sales in New South Wales were already slow at the start of 2020 and fell away dramatically in March. NSW sales in June and July 2020 are only 9.6 per cent higher than the previous two months and remain lower than levels prior to the pandemic. “The Victorian market has remained resilient despite the state’s COVID-19 challenges and the re-introduction of restrictions during July. The data, however, pre-dates the introduction of stage 4 restrictions which occurred at the beginning of August.
“Nationally, we expect that new home sales will settle in the coming months to a more sustainable level, but the number of new homes commencing construction will continue to slow for at least the next 12 months.”
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