The surge in demand for new homes tapered off in March, according to a monthly survey of Australia’s largest home builders.
The latest HIA New Home Sales report shows that sales of new homes fell in April 2021 to be 54.4% lower than in March as the HomeBuilder grant scheme came to an end.
Despite the drop, HIA Economist Angela Lillicrap remains optimistic.
“This sales result for April 2021 is an encouragingly strong result”, she said. “It suggests that there is a significant volume of new homes to be built for customers not eligible for HomeBuilder.”
Despite being well below recent peaks, sales in April 2021 are just 2.7% lower than the average month prior to the COVID shock.
“There is an unprecedented volume of building starts set to occur in 2021”, Lillicrap said, adding that 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.
“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.
“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”, she concluded.
Sales in April 2021 declined across all the five largest states, compared with the previous month. South Australia was down by 71.7%, followed by Queensland (65.6%) and Victoria (65.4%). New South Wales fell by 22.4% and Western Australia fell by 15.2% over the same period.
Over the past 12 months, sales in April 2021 were higher than their monthly 2019 average in New South Wales (up 30.3%) and Western Australia (27.5%). The remaining states declined over the same period, with Queensland down 4.8%, South Australia by 13.4% and Victoria down 26.5%.