This article is from the Australian Property Journal archive
NEW home sales fell by more than 50% in April, with the government’s HomeBuilder initiative wrapping up.
The latest HIA New Home Sales report, despite dropping 54.4% from March, sales levels are only 2.7% lower than the average pre-COVID month.
“This sales result for April 2021 is an encouragingly strong result. It suggests that there is a significant volume of new homes to be built for customers not eligible for HomeBuilder,” said Angela Lillicrap, economist at HIA.
The report, which is a monthly survey of the largest volume home builders across Australia’s five largest states, a sales decline across all five states.
South Australia saw the greatest decline at 71.7%, followed by Queensland which fell by 65.6% and Victoria which fell by 65.4%.
New South Wales’ decline was far less steep at 22.4% and Western Australia decreased by the smallest margin at 15.2%.
Over April, due to large volumes in the first quarter, sales in New South Wales and Western Australia were still up on their 2019 monthly average.
“The housing market in 2020 was heavily impacted by COVID-19, experiencing both record highs and record lows. As a result, in this edition of New Home Sales we are also comparing sales in 2021 to 2019, which is considered to be a “normal” year,” said Lillicrap.
Sales in New South Wales were up 30.3% on its 2019 monthly average, Western Australia was up by 27.5%.
Queensland however saw a decline of 4.8%, South Australia by 13.4% and Victoria at the greatest margin of 26.5%.
“The demographic shift in population towards regional locations and low interest rates will continue to drive demand for new homes over the months to come, albeit at a level well below recent peaks,” added Lillicrap.
“There is an unprecedented volume of building starts set to occur in 2021. HomeBuilder and lower interest rates have facilitated in a surge in demand for detached homes that ensures a record number of new detached homes will be built this year and into 2022.
Though dwelling approvals neared record levels in March, growing by 17.4%, after a rise of 20.1% in February, as buyers rushed to take advantage of the HomeBuilder initiative before its end. Australian PCI fell in April, though the high volumes in the first quarter will keep the construction sector busy for some time to come.
