A further 15,000 homes are expected to be constructed or majorly rebuilt after the federal government revealed a three-month extension to its HomeBuilder scheme.
HomeBuilder was initially brought in as a COVID-19 stimulus measure to drive demand in the construction sector and support jobs.
The government has attributed the scheme to the fourth consecutive month of increases in private sector house approvals, as reported by the Australian Bureau of Statistics (ABS).
The 10,692 approvals recorded in October mark the highest level of approvals in one month since February 2000.
New home sales are also up — 31.6 per cent higher in the three months to October when compared to the same period last year, according to the Housing Industry Association.
Loans for the construction of a new dwelling are also seeing marked increases in volume — up by 27.1 per cent across September, which is the highest result since the data was first collected by the ABS back in 2002.
In addition, there’s plenty of evidence to support the notion that first home buyers are benefiting from the stimulus measure, with the demographic accounting for 40 per cent of the owner-occupier loans issued in September 2020 — the highest proportion of first home buyers in a decade.
Prior to the extension’s announcement, the government was already expecting the scheme to support building works on 27,000 homes.
The extension means the government is now expecting a total of around 42,000 homes to be supported.
According to Prime Minister Scott Morrison, the scheme “is a key part” of his government’s economic recovery plan for Australia.
Considering it as “critical we keep the momentum up for Australia’s economic recovery”, he said the scheme’s extension will ensure a steady pipeline of construction activity to keep tradies on the tools.
Treasurer Josh Frydenberg has also weighed in, highlighting the housing sector as worth $100 billion a year to the national economy, or around 5 per cent of GDP.
“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,” he stated.
According to the Minister for Housing and Assistant Treasurer Michael Sukkar, HomeBuilder could see further adjustment dependent on the building and housing market’s conditions, and after consultation with the construction sector.
Scheme’s operation will change
A number of changes will occur as the extension period comes into play, the government has indicated.
For all new build contracts signed between 1 January 2021 and 31 March 2021:
- Eligible owner-occupier purchasers will receive a $15,000 grant;
- The property price caps for new builds in New South Wales and Victoria will be increased to $950,000 and $850,000, respectively.
The construction commencement deadline will also be extended, from three months to six months for all eligible contracts that have been signed on or after 4 June 2020.