HomeBuilder stimulus has done its job, says housing industry

The HomeBuilder package has bolstered land sales and is predicted to keep the industry active beyond the next 12 months.

The government’s HomeBuilder stimulus has done its job, says the industry.

The federal government’s HomeBuilder stimulus has helped bolster land sales over the past quarter and will keep the building industry active beyond the next 12 months, says the Housing Industry Association.

The HIA new home sales report shows the uptake of land in the three months to August was 61.3 per cent higher than the previous quarter, when confidence in the market was low due to coronavirus lockdowns, and when purchases reached the lowest level on record.

HIA chief economist Tim Reardon said the significant improvement shows the scheme – which was introduced in June offering a $25,000 grant incentive to build a new home – has achieved what was intended.

“New home sales data released today confirms that HomeBuilder will support building activity and protect jobs in the December 2020 quarter,” Mr Reardon said.

“Without intervention, a significant contraction of work on the ground would have occurred in the second half of 2020 which meant up to half a million jobs were at risk.

“The improvement in the number of new home sales over the most recent three months will see a lift in the number of homes under construction in the December quarter, compared to what would have been the case without HomeBuilder,” added Mr Reardon.

The monthly survey of Australia’s largest home builders in the five largest states showed the rise in sales was fairly widespread.

Additional cash injections on offer for first home buyers saw sales in Western Australia surge 175.2 per cent over the quarter to August.

While the significant rise over the past six months (up 91.1 per cent) is impressive against the contrast of the low activity seen over the past few years, the number of new home sales is still below the levels seen over the previous West Australian boom of 2012-15.

The HIA flagged sales levels may not gain enough momentum to return the state to its long term average.

Queensland new home sales rose 48.4 per cent over the August quarter, while South Australia was up 104.9 per cent through the same period.

Each of the smaller state’s recorded modest sales increases last month, the bigger states struggled.

In Victoria, sales fell by 14.4 per cent during the month of August due to stage four restrictions, with the HIA flagging another fall in September. However, the quarterly result was still 31.0 per cent higher.

Price cap restrictions saw NSW post a lacklustre performance in comparison to other states, up 12.8 per cent in the three months to August.