New home sales soar in response to HomeBuilder

Recent data released by the Housing Industry Australia (HIA) show new home sales have risen by 77.6 per cent in June, from a record low result in May.

HIA chief economist Tim Reardon said this result was off the back of the federal government’s HomeBuilder program announced at the beginning of the month.
“The rebound in new home sales in June does not fully offset the dismal results of the preceding three months and we are cautious of over interpreting data from a single month.
“It is a clear indication that HomeBuilder will help protect jobs in the sector in the second half of 2020 and into 2021,” Mr Reardon explained.
“Additional sales data from July and August will be necessary before drawing accurate estimates on the impact of HomeBuilder on employment in the sector.
“New home sales data is highly responsive to changes in consumer confidence.
“New home sales fell to their lowest level on record in March and continued to fall in April and May.
“Without intervention, a significant contraction in the volume of work on the ground would have occurred in second half of 2020 leading to a contraction across the wider economy.
“Up to half a million jobs were at risk without government intervention.
“The improvement in June can be seen across all the states which is a good indication that the HomeBuilder program is working, to varying degrees in each jurisdiction.
“The government’s announcement of the HomeBuilder program has seen confidence in the market improve.
“The cancelation rate (percentage of sales cancelled during the month) remains elevated at 23 per cent, down from a peak of 30 per cent in April,” Mr Reardon said.
Across the country, Western Australia had the largest monthly increase in June compared to May 2020, rising by 211.2 per cent, South Australia followed, increasing by 157.1 per cent, Victoria (+47.8 per cent), Queensland (+43.3 per cent) and New South Wales (+12.6) also recorded significant monthly increases.