This article is from the Australian Property Journal archive
THE federal government has responded to the success of the HomeBuilder scheme by extending the program, albeit reducing the grant to $15,000 but increased the property price caps in New South Wales and Victoria.
HomeBuilder will be extended from 1 January 2021 to 31 March 2021 which is expected to support the construction or major rebuild of around 15,000 homes. This is in addition to the 27,000 homes the scheme is already expected to support, bringing it to a total of around 42,000 homes across Australia.
Prime Minister Scott Morrison said the scheme was driving demand for building work and helping protect the jobs of one million Australians employed in the construction sector.
“It’s critical we keep the momentum up for Australia’s economic recovery.
“Extending HomeBuilder will mean a steady pipeline of construction activity to keep tradies on the tools,” the PM said.
Treasurer Josh Frydenberg added the scheme program has delivered the stimulus the housing sector needed.
“The sector is worth $100 billion dollars a year to the Australian economy or around 5% of GDP and more than a million people are employed in the sector across Australia.
“The success of this program has not only meant an increase in work on the ground to keep the pipeline of construction flowing but it has also protected jobs in the construction sector as well as across the economy.” Frydenberg said.
Minister for Housing and Assistant Treasurer Michael Sukkar said following consultantion with the secto, the program would also be adjusted.
For all new build contracts signed between 1 January 2021 and 31 March 2021:
- Eligible owner-occupier purchasers will receive a $15,000 HomeBuilder, reduced from the original $25,000;
- The property price caps for new builds in New South Wales and Victoria will be increased to $950,000 and $850,000 respectively, from $750,000;
- In addition, the construction commencement deadline will be extended from three months to six months for all eligible contracts signed on or after 4 June 2020.
Minister Sukkar said the most recent data showed HomeBuilder had already had around 24,000 applications, on track to exceed expected take up levels.
“There is no better proof of HomeBuilder’s success than the latest Housing Industry Association’s new home sales data, which shows sales are 31.6% higher in the three months to October 2020 when compared with the same time last year.
“This is a temporary and targeted programme and we want to give buyers the confidence and support to enter the market right now at a time when the economy needs it most,” he added.
The Urban Taskforce CEO Tom Forrest said the government has listened and welcomed the news.
“The HomeBuilder scheme was limited in its original design because of the price caps that resulted in very limited applicability in the main markets – Sydney and Melbourne.
“While the extension in the “requirement to commence construction work” from three months of an application to six months is very welcome, it is disappointing that the HomeBuilder support package has dropped from $25,000 to only $15,000 for applications made between 1 January and 31 March 2021.
“A late announcement is better than no announcement at all. This is a welcome adjustment to a successful program.” Forrest said.
The Property Council of Australia chief executive Ken Morrison said the extension will provide thousands more homes and tens of thousands more jobs while Australia prepares for a COVID safe restart to immigration and population growth.
“HomeBuilder saved the construction industry from falling off a cliff earlier this year. But with no substantial immigration likely next year, it makes sense to extend this economic bridge further.
“This is a big win for hi vis construction jobs across Australia and all the white collar jobs that support the sector,” he added. “Next year holds many challenges for all Australians including the huge economic activity gap that exists without normal immigration levels growing the economy and creating jobs.”
The HIA estimates that the extension of HomeBuilder will see at least 12,000 more new housing projects and a further 3,000 to 5,000 major renovation projects, take up the scheme, generating an additional $6 billion in construction work.
“HIA’s forecasts predicted a significant drop in housing demand in 2021 as HomeBuilder projects finished. This extension will ensure that the demand is carried forward to 2021 and activity will continue throughout the year,” managing director Graham Wolfe said.
Master Builders Australia CEO Denita Wawn said importantly, this move will help create a pipeline of work for commercial construction businesses that build high rise apartments and other medium density dwellings.
“Our forecasts show that their forward work is about to fall off a cliff with apartment construction activity facing a massive 40% drop.
“Extending HomeBuilder is a giant leap forward towards economic recovery. It will generate billions in economic activity, help save thousands of builder and tradie businesses from going under and protect thousands more jobs in the building supply chain,” Wawn said.
