The Federal Government’s HomeBuilder scheme introduced in early June offering eligible owner occupier purchasers a $25,000 grant has had immediate effect, substantially boosting new house demand. The 2,026 gross lot sales in June across Melbourne and Geelong represents the highest monthly total since the latter part of the previous market upturn in November 2017.
The monthly increase of 918 lots or 83% is the greatest escalation in both absolute and percentage terms since the Federal Government’s First Home Owner Grant scheme, introduced to boost purchaser sentiment during the last economic shock, the Global Financial Crisis in late 2008.
Casey experienced a near decade high of 432 gross lot sales, notable in comparison to all other corridors which recorded around two to three year highs.
Lots that were either titled or anticipated to be titled by the end of 2020 were in high demand, accounting for a significant 69% of gross sales. The anticipated spike was a result of the HomeBuilder scheme requiring purchasers to commence construction within three months of signing a build contract.
The impact on lot prices has been mild with both Melbourne’s median lot price and per sqm lot price increasing 0.6%. The median lot price rose to $314,000 with lot size remaining static at 400sqm.
The return to stage three restrictions in Greater Melbourne and Mitchell Shire will likely stymie sales momentum due to weaker purchaser sentiment. However, the HomeBuilder grant will still entice those with secure employment and income to enter the new housing market, supporting current pricing and defending against a collapse in sales activity as seen during the first lockdown in April.