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New home sales figures in January 2021 hit just 30 per cent of the number of sales seen at the end of 2020, it’s been revealed.
The Housing Industry Association (HIA) New Home Sales report found that the level of new home sales saw marked declines in the beginning of 2021, following the surge in sales seen at the end of 2020, which has since been attributed to the HomeBuilder grant.
In the December 2020 quarter, “households [were finalising] contracts to build a new home before the end of the 31 December 2020 deadline to access the $25,000 grant”, which resulted to almost 100 per cent higher level of new home sales compared to the same time the previous year, according to HIA chief economist Tim Reardon.
“As a consequence of HomeBuilder drawing forward sales in December, new home sales in January 2021 were just 30 per cent of the number of sales achieved in December 2020,” Mr Reardon added.
Further, the results of January 2021 were 12.1 per cent lower than the same time last year.
Despite the decline, HIA’s chief economist said that the results remain encouraging considering that January is typically a slow month for sales.
He has also indicated the possibility of sustained demand for new homes beyond the HomeBuilder scheme: “The impact of HomeBuilder is already being observed in record-high housing finance results and approvals data and this will lead to strong jobs growth in the industry in 2021.”
Moving forward, HomeBuilder sales are expected to push sales back until the end of March when the reduced $15,000 grant does come to an end.
As a result, sales could remain flat in February before surging upwards in March, according to Mr Reardon.
Even so, he tempered that “the March surge will not be of the same quantum as December due to the lower grant offering”.
“Low interest rates, rising house prices and a demographic shift in demand towards detached housing and regional areas should ensure ongoing demand for new homes albeit at a level significantly below that observed in the last quarter of 2020,” Mr Reardon concluded.
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