- Master Builders Australia data shows home building approvals reached record levels for December 2020
- These record levels are strongly attributed to the federal government's HomeBuilder grant program
The latest data released today from Master Builders Australia show new detached house building approvals rose by 14.9% during December 2020, reaching their highest level since records began in 1983.
The federal government’s HomeBuilder scheme strongly influenced the record results, spurring demand for house building and major home renovations (the Property Council of Australia issued similar sentiments as they welcomed the extension of the grant program into March 2021).
In particular, struggling housing markets like South Australia and Western Australia have benefitted greatly from the federal grant program.
“Along with detached houses, today’s figures show that the value of major home renovations approvals was 44.2 percent up on a year ago. This is another welcome development as renovations activity has struggled to find momentum over recent years,” said Shane Garret, Chief Economist of Master Builders.
Mr Garret adds that the performance of new housing ending 2020 has defied expectations, especially considering the tragic bushfires earlier in the year and the economic downturn caused by COVID-19.
Total new home building approvals rose by 4.8% during the year with detached house approvals up by 13.9% in 2019.
The strong performance of detached house approvals last year was in contrast to medium and high-density dwelling approvals, which dropped back by 8.9% during 2020.
Mr Garret claims “HomeBuilder will continue to support residential building up until the end of September, with the completion of this work taking us well into 2022.”
He however acknowledges that the residential building market will be exposed to two major challenges beyond 2022: (1) weak volumes of inward migration and (2) the subdued labour market conditions which are likely to persist for a number of years.