New Home Sales fall back to earth

New home sales are falling back to earth after the expiry of the HomeBuilder subsidies, according to the HIA:

“New Home Sales fell in April 2021 to be 54.4 per cent lower than March as HomeBuilder came to an end,” stated HIA’s Economist, Angela Lillicrap…

“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,” added Ms Lillicrap.

“Despite being well below recent peaks, sales in April 2021 are just 2.7 per cent lower than the average month prior to the COVID shock.

“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.

“A cooling in sales is to be expected as the grants available through the HomeBuilder program came to an end in March…

Sales in April 2021 were higher than their monthly average in 2019 in New South Wales (+30.3 per cent) and Western Australia (+27.5 per cent). The remaining states declined over the same period – Queensland (-4.8 per cent), South Australia (-13.4 per cent) and Victoria (-26.5 per cent).

Nevertheless, new home construction should remain elevated into 2022 given buyers now have 18 months from signing their HomeBuilder contracts to commence building works.

Unconventional Economist

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