Western Australian new home sales have more than doubled, moving the state leaps and bounds ahead of the eastern coast.
In the three months to October, WA sales went up 132.2% compared with last year, with sales elevated across the country according to the latest HIA report. South Australian new home sales are up 38.1%, Queensland 26%, New South Wales 14.% and Victoria 2.2% according to the latest HIA report.
Strong home buyer incentives vary across the states, with people looking for a new home in WA eligible for up to $55,000 from government grants — the highest in the country.
Nationally new home sales are 31.6% higher, however new home sales fell marginally by 1.3% in the month of October.
Private new home sales in Australia
The detached housing market is the outperformer that the lead is attributed to, and it continues to perform strongly. As it accelerates, the market will pull the rest of the Australian economy forward into 2021.
The strength of the market response is due to several factors in addition to HomeBuilder. Lower interest rates and fiscal stimulus, such as JobKeeper, have also seen households more willing to spend on housing. It has also meant that households have been able to continue with plans of moving/renovating as restrictions have eased.
Earlier in the month the Reserve Bank of Australia cut interest rates to a record low of 0.10%. Housing loan commitments and price trends across the country suggested that conditions in the detached housing market remained stronger than in the apartment market; growth in rents for apartments remained weak in most cities.
“Members noted that prices had declined over recent months in Melbourne and, to a lesser extent, in Sydney,” the RBA board noted, “these declines had been smaller than those recorded in 2018. Elsewhere, housing prices had generally increased in recent months.”
The latest revision of market predictions, ANZ economists forecast house prices to grow 9% in 2021. This is a huge change from the start of the start of the pandemic where economists predicted house prices would drop 10%. Will this prove to be true? It’s simply too early to tell, but with the housing market looking up and interest rates expected to remain low for some time, it’s looking increasingly likely that 2021 will not be as gloomy as many feared.