New home sales fall in January

New home sales fell in January 2021. They were 12 per cent lower than at January last year, according to the HIA’s chief economist, Tim Reardon who expected a decline given the winding back of the HomeBuilder program on December 31.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.

“New Home Sales reached remarkable heights in the December 2020 quarter, almost 100 per cent higher than at the same time the previous year,” Reardon noted.

The surge in sales at the end of 2020 can be attributed to HomeBuilder as households finalised contracts to access the $25,000 grant.

“As a consequence of HomeBuilder drawing forward sales in December, new home sales in January 2021 were just 30 percent per cent of the number of sales achieved in December 2020.

“This is still an encouraging result given the nature of the market in January, which is typically a slow month for sales. 

“After drawing forward sales into December, HomeBuilder will also push sales back until the end of March when the reduced $15,000 grant ends,” he added.

Sales are expected to remain flat in February before another surge in March.