It seems there has never been a better time to build a new home, with the building and construction industry reaching record highs in multiple areas in recent months. 2020 data reveals the ongoing strength of the housing market around Australia, with growth expected to continue.
New Home Building Loans At Record Highs
The number of loans for the construction of new dwellings has continued to rise, with the Housing Industry Association’s latest data revealing a December rise for the sixth consecutive month.
‘This is the highest monthly result since the Australian Bureau of Statistics (ABS) began reporting this data in 2002, surpassing the record set in September, October and again in November,’ stated Angela Lillicrap, economist at HIA. ‘The number of construction loans to owner occupiers in the December quarter has doubled since the same time last year. This leaves the number of loans in 2020 higher than in 2019 by 36.3%.’
The bolster is due to a number of factors, including the HomeBuilder grants from the federal government, which have been extended to allow applications until 14 April 2021. The loans provide grants of up to $25,000 to eligible owner-occupiers for new builds or substantial renovations. Other factors resulting in improved confidence in the housing market include interest rate cuts, house price growth, and the easing of finance restrictions.
High Demand for Residential Land
Figures from the September 2020 quarter reveal a strong surge in demand for vacant land in Australia. Demand for residential land rose by 27.7% during the period, finished at 62.7% higher than at the same time in 2019.
Housing Industry Association Economists predict that residential land will continue to be in high demand into 2021. Trends driving an increase in home building, such as HomeBuilder, low interest rates, and high property prices, have contributed to the rise in demand.
The increase in demand for residential vacant land also demonstrates a shift in values caused by the COVID-19 pandemic. More Australians are moving to regional areas and to the peripheries of major cities, rather than wanting to live in more urban areas.
Detached Building Approvals Continue to Rise
Australian Bureau of Statistics data reveals that building approvals for detached houses have risen in December, marking the sixth consecutive month of growth. Approvals in the December 2020 quarter were 73.7% higher than at the same time the previous year, and approvals for the 2020 calendar year finished 13.9% higher than in 2019.
As with other increases in the building and construction industry, the HomeBuilder grants have been credited with the strong growth. ‘The surge in the number of building approvals has continued each month since the announcement of HomeBuilder in June,’ comments Angela Lillicrap.
It is also expected that detached home approvals will continue to rise in the coming months. ‘Building approvals data lags behind other leading indicators including new home sales and housing finance data, both of which set new records in December. With this in mind, it is likely that we have not yet seen the peak of detached home building approvals,’ says Ms Lillicrap.
Take Advantage of A Strong Market
With the property market in Victoria going from strength to strength, now might be the perfect to start your new home. Why not let Homeshelf take some of the stress out of the process? We can help you find the perfect builder for your new home.