HomeBuilder Boosts Demand for New Homes
In a rush to make the most out of the Federal Government’s HomeBuilder grant, new home sales heavily increased in December. Sales almost doubled November’s results, according to the Housing Industry Association (HIA).
December Demand Reaches 2nd all time high
Statistics from the HIA’s New Home Sales report show an incredibly high demand for new housing across the country. Queensland’s new home sales in the December quarter grew by 99.9 per cent, compared to the same quarter in 2019.
HIA’s Economist, Angela Lillicrap, says “this is the second strongest month of new home sales in the 20-year history of the survey, only exceeded by March 2001”.
“This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the 31st December, 2020 deadline to access the $25,000 grant.
“The extension of the timeframe to commence building from the three months to six, which was announced in November, played a significant role in December’s results.”
Created to help the residential construction industry bounce back from the pandemic, the grant has now been extended to March 2021, with a reduced value of $15,000. While the grant amount has decreased, a relatively high volume of sales is still predicted to occur this month (January, 2021).
“Low interest rates, improved lending assessment and growth in the price of established homes will also support demand for new homes in 2021,” says Lillicrap.
More opportunities to enter the market
HomeBuilder has provided Queenslanders with the opportunity to get their foot on the property ladder, further boosted by their opportunity to save more throughout the pandemic.
“COVID-19 has definitely put more money back in the pockets of a lot of people because they aren’t spending it on overseas trip, instead they’re spending more time at home,” says Rohan Buckley, Mobile Bank Manager at Auswide Bank.
An increased amount of savings and an increased number of governmental schemes makes it a lot easier for buyers to enter the property market. In addition to HomeBuilder, eligible first home buyers in Queensland also have access to the First Home Owner’s Grant and the First Home Loan Deposit Scheme.
“An increase in savings is going to help people borrow more,” says Buckley.
“The First Home Loan Deposit Scheme aids with alleviating lenders mortgage insurance and allows buyers to get in on a deposit of 5 per cent rather than having to save more to reduce the cost of lenders mortgage insurance.
“These schemes are helping bring people into the property market a lot earlier.”
Although these governmental schemes are assisting in Queensland’s economic recovery from COVID-19, the First Home Owner’s Grant could allow this to go even further. Extending this grant to established housing would further incentivise buyers to get into the market as it would provide them with greater choice and more affordable options.