It is fair to say that the Morrison Government’s HomeBuilder subsidy has been incredibly successful in juicing new home construction and supporting the economy.
Detached house approvals surged to their highest level in the series’ 38-year history in December:
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Construction finance has also soared to unprecedented highs:
Today, the Housing Industry Association (HIA) has issued a media release forecasting that detached house construction will hit record highs in 2021 on the back of HomeBuilder:
“It is anticipated that almost 130,000 new detached homes will commence construction in 2021. The previous record of 120,000 starts in a calendar year was set in 2018,” stated HIA’s Chief Economist, Tim Reardon…
“HomeBuilder has delivered. All leading indicators show a record volume of detached homes about to commence construction and this is occurring in almost every location across Australia…
“The extension of HomeBuilder in November is the primary cause of this significant upgrade in our forecast but the demographic shifts are also driving demand for detached homes”..
This pull forward of demand will obviously leave a bigger supply glut down the track. Indeed, the National Housing Finance & Investment Corporation (NHFIC) in December forecast massive oversupply in 2021 and 2022, presumably off lower construction forecasts than the HIA:
But for now, HomeBuilder is doing its job.
Expect the property industry to step up lobbying efforts to reboot mass immigration.
The only way to fill these surplus homes is via hundreds of thousands of warm immigrant bodies.