The federal government’s HomeBuilder scheme has pushed up new home sales since the pandemic began, a recent survey from the Housing Industry Association (HIA) has revealed.
The report showed that new home sales were 11.8% higher in the seven months after COVID-19 restrictions came to effect compared to the same time last year.
Tim Reardon, chief economist at HIA, said the sharp rise can be largely attributed to the initiative.
“HomeBuilder has been successful in providing consumer confidence for those customers that had delayed a major investment decision earlier in the year,” he said. “The program has also brought buyers into the market that would otherwise not been able to purchase their first home for a number of years.”
Reardon also said that the sales growth would support the construction of detached homes in the aftermath of the COVID-19-fuelled recession and “pull the rest of the economy forward into 2021.”
However, the report found that the positive impact of the HomeBuilder grant varied across states.
Over the seven months to September, new home sales in Western Australia have soared 95.7% compared to the same period last year, the highest among all states. Sales in Queensland and New South Wales also rose 7.1% and 3.3%, respectively, while South Australia posted a marginal increase of 0.5%. Victoria is the only state where sales have gone down at 10.8%.
“Despite a fall in sales in Western Australia in the month of September, new home sales in the seven months since March are almost 100% higher than at the same time in 2019,” Reardon said. “[The state] should see an increase in new home building to levels last experienced a few years ago, but not back to the boom levels of 2014.
“South Australia is also seeing significant new investment coming into the pipeline and a very strong start to 2021, [while] sales in Victoria were surprisingly strong considering Stage 4 restrictions were still in place. This result likely reflects contract negotiations that commenced before restrictions came into effect.”
However, Reardon said that the scheme provided a limited window for prospective beneficiaries to purchase a new home, with the program ending on 31 December for eligible sales.
He said delays in processing times of loan applications were among the biggest obstacles eligible applicants were facing.
“Delays in the processing of new home loan applications is the most significant constraint to getting these new building projects under construction,” he said. “Processing times for new home loans remain at around two months. Access to finance for new home construction has become exceptionally tight following new regulations introduced in recent years.”
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