Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
New home sales were nearly 40 per cent higher in the first three months of the year than during the same period last year.
The Housing Industry Association’s new home sales report found sales in the March quarter increased across all of the nation’s five largest states.
Overall, sales were 39.4 per cent higher in the March quarter compared to the same quarter last year.
Strong new homes sales were the result of the Morrison government’s HomeBuilder program, record low interest rates, changing population dynamics and improving market confidence.
“In December 2020, there was a near record volume of new home sales as households rushed to finalise contracts to build a new home before the end of the (HomeBuilder) $25,000 grant,” HIA economist Angela Lillicrap said.
“This same effect can be seen in March as households rushed to get access to the $15,000 grant.”
She said the HomeBuilder program has brought forward demand for new homes and, as a consequence, sales over the coming months are expected to cool from recent highs.
The HomeBuilder program ended last month, but at the weekend the government extended the deadline to begin construction by an additional 12 months.
Those who were eligible for the grant before its March 31 conclusion – some 121,000 building applications, according to the government – will now have 18 months after signing contracts to commence construction.
Treasurer Josh Frydenberg said the scheme would cost the government $2.5 billion but had helped tip some $30 billion into Australia’s construction sector amid the COVID-19 pandemic.
The HomeBuilder scheme was introduced during the depths of the pandemic and late last year was extended to March, although the size of grants was trimmed from $25,000 to $15,000.