It’s now 6 months HomeBuilder was announced by the Prime Minister, the Treasurer and the Minister for Housing.
Master Builder Chief Economist Shane Garrett takes a look at what the ABS data tells us about the success of HomeBuilder so far.
The HomeBuilder scheme was announced by the Prime Minister on Thursday, 4th June. Over the following weeks, each of the states and territories each activated the Scheme in their own jurisdictions, with several of them topping up HomeBuilder with additional locally-funded grants.
In terms of gauging the HomeBuilder scheme’s effectiveness, only a limited amount of official data has been published so far. The most relevant of this includes ABS building approvals data that is published monthly with the latest figures covering the period to August 2020 and figures on home loans also compiled by the ABS and these are currently available up to August 2020.
The lending figures suggest that HomeBuilder has so far been effective in boosting the demand for residential land lots as well as the volume of loans for new home construction.
During August 2020, there were 4,679 loans provided to owner occupiers for the construction of a new home. This was the highest monthly result in over 10 years and represented a 22.9% increase on July’s result (seasonally-adjusted figures).
There has also been a strong gain in number of loans for residential land purchase since the HomeBuilder was announced.
In August, a total of 5,009 loans were provided to owner occupiers for the purchase of residential land. This is more than double was the monthly volume of lending (2,321) had been in May – just before HomeBuilder was announced (these figures are not seasonally adjusted).
The latest figures on building approvals which run to August 2020 indicate that the pipeline of detached house building as well as major home renovations work has responded favourably to HomeBuilder.
During August 2020, the number of new building approvals totalled 9,402, which was 4.6% higher than in July and some 12.3% up on the same month in 2019 (seasonally adjusted).
The value of home renovations work receiving local government approval during August 2020 was $784.3 million, an increase of 7.0% on the previous month and 11.6% higher than a year earlier (seasonally adjusted).
However, latest approvals show that HomeBuilder has not appeared to stimulate higher density housing. During August 2020, the number of building approvals for apartments/units dropped by some 12.9% compared with July and was 18.1% lower than a year earlier.
Some more useful data follows in the charts and tables that follow.