The detached housing segment remained elevated in October compared to last year despite the slight monthly dip in sales, according to the latest market update by the Housing Industry Association (HIA).
New home sales declined by 1.3% in October. Despite this drop, sales of new homes remained 31.6% higher over the three months to October than during the same period last year.
Tim Reardon, chief economist of the HIA, said the lower interest rates, the fiscal stimulus such as JobKeeper and the housing support schemes like HomeBuilder have supported households, giving them an opportunity to spend on housing.
"HomeBuilder was the catalyst for improving consumer confidence in the housing market. The strength of the market response is due to several factors in addition to HomeBuilder," he said.
Some households, Reardon said, have already ready readjusted their budgets, with some redirecting their expenditure from travel and entertainment towards housing, including renovating their home. This is particularly true among sea and tree changers, who have taken the year as an opportunity to relocate from inner cities to regional areas.
"An unexpected reversal to the urbanisation trends of the past century has seen an increase in demand for detached housing. There has been a sudden shift in Australia’s population away from central Sydney and Melbourne to all other regions," he said.
In fact, sales in regional areas increased significantly in Western Australia, which clocked a 132.2% growth during the three months to October. South Australia (38.1%), Queensland (26%), New South Wales (14.6%), and Victoria (2.2%) also posted gains in new house sales over the quarter.
“This switch in the urbanisation trends will revert when the economies of Sydney and Melbourne return to full strength," Reardon said.
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