Invest
HomeBuilder appears to be working: Here’s why
Preliminary data is suggesting that the HomeBuilder scheme is doing what it was intended to do – secure jobs and inject confidence back into the economy.

HomeBuilder appears to be working: Here’s why
Preliminary data is suggesting that the HomeBuilder scheme is doing what it was intended to do – secure jobs and inject confidence back into the economy.

According to the HIA – an advocacy body for the Australian residential building industry – new home sales rose by 77.6 per cent in June, from a record-low result in May.
The organisation’s chief economist, Tim Reardon, said the rebound “does not fully offset the dismal results of the preceding three months, and we are cautious of over-interpreting data from a single month”.
But he did acknowledge that “it is a clear indication that HomeBuilder will help protect jobs in the sector in the second half of 2020 and into 2021”.
While additional sales data from July and August will be necessary before accurate estimates can be drawn around how effective HomeBuilder actually is, Mr Reardon said that “new home sales data is highly responsive to changes in consumer confidence”.
With new home sales having fallen to their lowest level on record in March and continuing to trend downwards across April and May, the economist explained that 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.
“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,” he continued.
So, what states are benefitting the most?
According to Mr Reardon, Western Australia has experienced the largest improvement, with sales more than doubling during the month of June.
While this figure did come from an exceptionally low base, he was not surprised – given the state government’s Building Bonus program, which if combined with the first home buyer scheme can provide support exceeding $50,000 to eligible new purchasers.
The westernmost state saw a 211.2 per cent monthly increase in new home purchases in June alone.
South Australia came in second, with a 157.1 per cent increase over the month when compared with May.
Victoria saw a 47.8 per cent increase, while Queensland purchases rose by 43.3 per cent.
NSW saw a 12.6 per cent monthly increase.
But it’s not all smooth-sailing
The HIA also pointed out that the cancellation rate remains higher than usual.
While 30 per cent of all new sales were cancelled in an April peak, Mr Reardon observed that the number remains elevated – at 23 per cent.
He said, “This suggests that there are still many households that have made the decision not to proceed with a previous new home purchase in light of the changed economic conditions.”
About the author

About the author


Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more

Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more

Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more

Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more

Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more

Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more

Property
6 key indicators to heed when buying your next investment property
Self-proclaimed data nerds Arjun Paliwal and Kent Lardner have shared their six must-know indicators when researching your next investment property. ...Read more

Property
RBA admits low interest rates will boost cost of housing
The RBA has confirmed that it is closely monitoring the impact of low interest rates on the level of housing loan commitments and acknowledged the “inherent” risk of soaring asset prices in the ho...Read more

Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more

Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more

Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more

Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more

Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more

Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more

Property
6 key indicators to heed when buying your next investment property
Self-proclaimed data nerds Arjun Paliwal and Kent Lardner have shared their six must-know indicators when researching your next investment property. ...Read more

Property
RBA admits low interest rates will boost cost of housing
The RBA has confirmed that it is closely monitoring the impact of low interest rates on the level of housing loan commitments and acknowledged the “inherent” risk of soaring asset prices in the ho...Read more