Property buyers looking to cash in on the HomeBuilder grant should proceed with caution, with uncertainty around building costs and job security in the coming months creating some potential risks.
While the government’s HomeBuilder grant may seem like a good opportunity, Next Address managing director Julie O’Donohue has warned property buyers, particularly first home buyers, to think very carefully about any potential risks that might arise in coming months before deciding to purchase land and build a new home.
Ms O’Donohue, whose firm offers real estate marketing services to both buyers and sellers, said it will be difficult to predict what will happen with building costs in the current environment, for example.
If there are shortages in building products resulting from difficult business conditions or COVID-19 restrictions, along with increased demand for building supplies, this could see a rise in building costs, she cautioned.
“There already seems to have been increases in property prices in some areas, and there may be flow-on costs associated with building as we go through the next 12 to 18 months. So, while it might look really good on paper, you really need to do your sums for the investment, particularly if you’re a first home buyer,” she said.
Another risk that first home buyers in particular need to be aware of, she said, is the uncertainty with the economy at the moment and what this means for job security.
“They might make a decision [to build a home] and then lose their job in six months’ time,” she said.
“The economy is going to struggle for such as long time. You may have a job now and everything is fine, but suddenly in six months’ time you could find yourself without a job or your hours have been reduced.”
There is a risk that as the government withdraws some of its support measures, businesses may not be able to maintain their current level of employment, she said.
“Property buyers need to be really careful about where they’re buying, what they’re buying and what you’re signing up for,” she warned.