HomeBuilder is driving Australia's residential construction comeback
Today’s Australian Bureau of Statistics lending indicators for October 2020 shows loan commitments for the construction of new dwellings rose by 11.5 per cent.
The October result once again broke the monthly record achieved in September for the highest amount of new loan commitments recorded since 2002, when data of this kind was first collected.
First home buyers continue to lead these numbers with owner occupier first home buyer loan commitments increasing by 3.4 per cent in October to reach 13,481. This is more than 30 per cent higher than in any pre-COVID month since 2009.
However, Westpac's Matthew Hassan said housing finance approvals came in a little softer than expected, the total value of new loans rising just 0.7% vs expectations of a 2% gain.
"The underlying tone from the detail was still strong with the main downside surprise relating to a bigger than expected COVID-related decline in Victoria that will reverse in coming months and approvals across the rest of Australia posting another robust rise to historical highs," he said
An example of a townhome eligible for HomeBuilder is Ramley Residence.
Located at 2-6 Ramleh Road, Reservoir VIC 3073, the development has townhomes starting from $689,000.
"Today’s outcome is yet another endorsement of the effectiveness of HomeBuilder in protecting the jobs of the one million Australians in our construction sector and driving our comeback from the COVID-19 recession," commentary from the ABS found.
"Housing Industry Association new home sales data for October 2020 that shows new home sales were 31.6 per cent higher in the three months to October when compared with the same time last year."
"ABS building approvals data for October 2020 showed approvals for private sector houses rose for the fourth consecutive month, and are at the highest recorded level since February 2000, with 10,692 approvals."
"Australia has recorded a ten-year high for first homes buyers in the last quarter, according to the latest REIA's The Housing Affordability Report."
As a result, the Morrison Government has announced HomeBuilder will be extended until 31 March 2021. For all new build contracts signed between 1 January 2021 and 31 March 2021, eligible owner-occupier purchasers will receive a $15,000 grant; and the property price caps for new builds in New South Wales and Victoria will be increased to $950,000 and $850,000 respectively.
In addition, the construction commencement deadline will be extended from three months to six months for all eligible contracts signed on or after 4 June 2020.
Find more HomeBuilder eligible property, Buy now + save: 20 Urban listings eligible for the $25,000 HomeBuilder Grant.