New home sales solid post stimulus

The HIA has released new home sales data for August, which rose 5.8% over the month and continues to track at a solid level following the expiry of the HomeBuilder subsidy in March:

“The strength in New Home Sales in recent months indicates that the boom in detached home building will continue to create strong employment opportunities into the second half of 2022,” stated HIA Economist Tom Devitt…

“New home sales remained strong in August, albeit not at the record levels observed prior to the end of HomeBuilder in March 2021,” added Mr Devitt.

“Sales in the three months to August 2021 were 15.5 per cent lower than the same time in 2020.

“A more reasonable timeframe for comparison is the same period in 2018 and 2019, before the adverse impact of COVID-19 and the stimulus from HomeBuilder.

“In the past three months sales were 15.4 per cent higher than at the same time in 2019 and 4.5 per cent higher than the same time in 2018.

“This strength in sales of new detached homes is likely due to increased household savings during the pandemic. There has also been a switch in market preference toward lower density homes as working from home becomes entrenched,” concluded Mr Devitt.

In the three months to August, Western Australia led the pack, up by 60.0 per cent compared to the same quarter in 2019, followed by New South Wales (+28.1 per cent), Victoria (+6.7 per cent), Queensland (-1.5 per cent) and South Australia (-15.2 per cent).

The latest new home finance data from the ABS also showed that construction loans have fallen back to earth following the end of HomeBuilder:

Construction loans

Dwelling approvals have also fallen sharply:

Dwelling approvals

Together, this data suggests that dwelling construction should remain strong for the remainder of this year before slumping in 2022.

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments are hidden for Membership Subscribers only.