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Proof house prices will surge in 2021 with new home sales DOUBLING in just one month

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Proof house prices will surge in 2021 with new home sales DOUBLING in just one month

  • Australian home sales in December 2020 surged by 91.8 per cent to 13,527 deals
  • Housing Industry Association data showed the biggest monthly rise since 2001 
  • This coincided with record-low rates and extension of the HomeBuilder scheme
  • Reserve Bank of Australia expecting a 30 per cent house price rise in three years 

Australia’s property market is heating up with monthly sales of new homes almost doubling in just one month.

In December, 13,527 newly-built houses were sold – a surge of 91.8 per cent compared with November marking the biggest monthly lift since March 2001, new Housing Industry Association data has revealed.

The news was released a day after it emerged the Reserve Bank of Australia is bracing for a 30 per cent increase in real estate values during the next three years as a result of record-low interest rates.

Australia's property market is heating up with monthly sales of new homes almost doubling in just one month. Pictured is a house under construction in Melbourne

Australia’s property market is heating up with monthly sales of new homes almost doubling in just one month. Pictured is a house under construction in Melbourne

HIA economist Angela Lillicrap is expecting some of the sales momentum to continue this month, after the federal government extended until March 31 $15,000 HomeBuilder subsidies for those who build a new home or substantially renovate an existing one. 

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‘Low interest rates, improved lending assessment and growth in the price of established homes will also support demand for new homes in 2021,’ she said.

‘It is not expected that this remarkable volume of sales will continue into January.’

Australia’s big banks are offering fixed-rate home loans of less than two per cent, after the Reserve Bank in November cut the cash rate to a record-low of 0.1 per cent and embarked on a quantitative easing program of buying government bonds.

In 2020, new home sales surged by 32.5 per cent compared with 2019, the HIA data showed.

This followed the June release of the initial $688million HomeBuilder scheme, which until December 31 gave a more generous grant of $25,000 to build a new home worth up to $750,000 or renovate an existing one worth up to $1.5million. 

In December, 13,527 newly-built houses were sold - a surge of 91.8 per cent compared with November marking the biggest monthly lift since March 2001, new Housing Industry Association data has revealed

In December, 13,527 newly-built houses were sold – a surge of 91.8 per cent compared with November marking the biggest monthly lift since March 2001, new Housing Industry Association data has revealed

HIA economist Angela Lillicrap is expecting the sales momentum to continue this month, after the federal government extended until March 31 $15,000 HomeBuilder subsidies for those who build a new home or substantially renovate an existing one. Pictured is a Brisbane auction

HIA economist Angela Lillicrap is expecting the sales momentum to continue this month, after the federal government extended until March 31 $15,000 HomeBuilder subsidies for those who build a new home or substantially renovate an existing one. Pictured is a Brisbane auction

Owner-occupiers and first-home buyers last year dominated home sales, instead of the usual investors, as Australia sunk into recession for the first time since 1991. 

In November and December, house prices rose in every state and territory capital city, following the end of Melbourne’s three-month lockdown, CoreLogic data showed.

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Regional areas did even better, with house prices rising by 7.1 per cent in 2020 compared with an average of 2.6 per cent in the combined value of capital cities.

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