New home sales reach two-decade high

The report showed buyers were encouraged to flock to the market by the HomeBuilder stimulus, as many households rushed to finalise contracts before the 31 December 2020 deadline to access the $25,000 grant.  

“This is the second strongest month of new home sales in the 20-year history of the survey, only exceeded by March 2001,” HIA’s economist, Angela Lillicrap, said.

“It is not expected that this remarkable volume of sales will continue into January. 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.”

While new home sales are set to fall compared with December 2020, record-low interest rates and the improved regulatory environment is expected to support demand for new houses 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. 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,” Ms Lillicrap said. 

Across the country, new home sales in the December 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 NSW (61.7 per cent).