The HomeBuilder grant, coupled with other government incentives and ongoing low interest rates, have contributed to a 91% surge in new home sales in December, according to the latest data from the Housing Industry Association (HIA).
The data incorporates the final days that the cash grant was valued at $25,000. From January 1 to March 31, 2021, the cash grant is reduced to $15,000. The HomeBuilder grant is estimated to underwrite more than $50 billion in broader economic activity and support more than $18 billion worth of new construction in 2021.
e&s co-owner, Rob Sinclair believes the grant has been a key driver of new home sales and will bring customers into stores to purchase new appliances.
“We expect new home sales to continue rising throughout 2020, coupled with a strong replacement market, particularly for dishwashers, laundry and refrigeration, that could persist for the next three to four years,” he told Appliance Retailer.
“Home nesting, whether forced or chosen, has seen consumers use their appliances more and encouraged them to learn new cooking skills. Before the pandemic, cooking at home was a rarity with many people using food delivery services or buying pre-made meals. Covid-19 has created a permanent change to home life with a renewed sense of family and engagement with appliances. In the absence of international travel, there has been a lift in local spend, particularly on the home, and I believe we are yet to see the peak of it.”
Status Plus director, Ashley Balderson described the correlation between the construction and appliance industry as a “blessing” during the pandemic.
“Cairns is a tourist-based town focused on the international traveller and without this government stimulus to trigger construction and renovations, North Queensland would be on struggle street. People are at home often unable or wary to travel interstate and renovation is a massive focus, so it is a perfect storm,” he said.
Camberwell Electrics owner, Hans Vanderstadt said any government stimulus is always good for the economy, particularly with the severe impact of lockdowns on building projects in Victoria, but people are now starting to come out of hibernation and are feeling more confident.
“During the last few months, there has been a strong replacement market but since the turn of the New Year, we have seen more customers upgrading their appliances. We expect this trend to continue while travel restrictions remain in place,” he told Appliance Retailer.
Smeg Australia managing director, Jim Kalotheos said the government grant was one of the reasons for a spike in consumer demand.
“We also found that consumers purchased total cooking packages, rather than simply upgrading or replacing appliances,” he said.
The grant combined with limitations on travel have been a welcome driver for the building channel across Australia, according to Fisher & Paykel chief operating officer, Jeremy Sargeant.
“We believe the sales builders are experiencing due to this support will continue to filter through to our industry in the medium term. Building sites during lockdowns were deemed essential and, following strict protocols, the sector has been able to respond quickly to support and stimulate new home sales.”
Electrolux Home Products managing director for Australia and New Zealand, John Featherstone said sales in 2020 were buoyed by a number of factors, including the HomeBuilder grant.
“Electrolux had already seen a positive uptick in sales generally across the whole year as people spent more time in their homes. We have been fortunate to see sales growth across the entire product range with cooking performing extremely well.”