An Australian economist is predicting the largest increases in dwelling demand in the next 12 months will be in Queensland and Western Australia, due to the HomeBuilder Program.
According to the Australian Bureau of Statistics, dwellings approval figures recently declined in August as national total dwellings dropped by two per cent.
However, 9402 housing approvals prevented a decline to five per cent, while attached dwellings dropped by 13 per cent. Dwelling approvals fell by 13 per cent.
According to BIS Oxford Economics, the HomeBuilder program and record low interest rates will prevent dwelling approvals from sinking across Australia. This is due to an increase in land sales and buyer interests that provide the future potential of dwelling demand.
BIS Oxford’s economist for building and construction Maree Kilroy told Quarry record growth is expected for house construction in the next 12 months, while dwellings will continue to fall.
“Initial feeds on the HomeBuilder program and other incentives have been encouraging for house construction, in which we expected record growth in annual terms over the next 12 months,” she said.
“Unlike houses, it is difficult to find any concrete positive leads for off-the-plan apartment sales. As such, attached dwelling commencements are expected to continue falling.”
Kilroy said the Federal Government stimulus will lead to Western Australia and Queensland seeing the most significant increase to dwellings demand.
“Western Australia and Queensland are expected to see the greatest increase in dwelling demand in 2021 of the major states,” she said.
“In the most aggressive response by any state government, Western Australia has announced a suite of housing-related stimulus including a six-month $20,000 Building Bonus grant for new home builds, which is open to all buyers, including investors. Stacked with other incentives, including HomeBuilder, first home buyers are now eligible for $55,000 in grants when building a new home.
“Recent data shows an already strong response to these measures which underpins our outlook for the state.”
For Queensland, its containment of COVID-19 will help the state take advantage of stimulus packages.
“The containment of COVID-19 infection numbers in Queensland sees it well placed to take full advantage of the stimulus on offer,” Kilroy said.
“Off a low starting base, a 50 basis point cut to interest rates at the onset of the pandemic, the HomeBuilder program and an additional $5000 regional grant announced by the Queensland Government in June 2020 are expected to boost new dwelling construction in Queensland.”