Housing stimulus to keep WA economy ticking
Announcements from the Federal and State Governments over the past week are set to inject much needed confidence and activity into the local housing and construction industries. The HomeBuilder and Building Bonus packages come at a critical time following concerning forecasts from the Housing Industry Forecast Group (HIFG), whose latest data predicted the lowest number of dwelling construction starts across WA in close to 40 years.
On Thursday, the Federal Government launched the $680 million HomeBuilder program that will see $25,000 grants provided to owner-occupier Australian citizens who commence construction on a new house or undertake substantial renovations on a new house between 4 June and 31 December 2020. Further eligibility criteria include income caps at $125,000 in 2018-19 for individuals and $200,000 for couples.
New homes cannot exceed $750,000 in value for the combined house and land it is situated on, while renovations must not exceed $750,000 in value and the house and land combined must not exceed $1.5 million. Construction on new homes must begin within three months of the contract being signed.
The grants will be administered through State Revenue Offices in conjunction with existing housing incentives and concessions.
“With weak consumer confidence and population growth, the industry needed a circuit breaker and this HomeBuilder program is very welcome,” said Property Council of Australia Chief Executive Ken Morrison.
“It will be important to maximise the volume of jobs saved over coming months and we look forward to working with the government on its implementation and design,” Mr Morrison added.
The State Government followed the HomeBuilder launch with the Building Boost announcement on Sunday morning. Building Boost, worth $444 million, will provide additional grants for new homes on top of the HomeBuilder grant, with fewer eligibility limits and a strong focus on social housing. Building Boost is estimated to support up to 4,300 local jobs across the private and social housing sectors.
An additional $20,000 will be available for people building a new home in WA between 4 June and 31 December 2020. It will also be available for soon to be completed townhouses and low-rise strata complexes already under construction and due to be completed within the Building Boost period.
The existing 75 per cent stamp duty rebate for off-the-plan apartment sales will be extended to off-the-plan purchases under construction and not covered by the initial rebate. The rebate will be capped at $25,000 for off-the-plan purchases now covered by the rebate.
Further funding for social and affordable housing units was also announced, with $319 million to be spent on building, buying and refurbishing thousands of social housing units across WA. Nearly $100 million has been allocated to build and buy a further 250 social housing units, which will include the Department of Communities purchasing off-the-plan apartments to allow developers to reach pre-sales levels required for construction to begin.
The remaining funds will be used to refurbish 3,800 social and government employee houses across the State, with $80 million earmarked for a special regional and Aboriginal community maintenance program.
“The addition of the McGowan Government’s Building Bonus on top of the Federal Government’s HomeBuilder scheme is an absolute game-changer for Perth’s languishing residential property market,” said Sandra Brewer, Property Council WA Executive Director.
“We are pleased to see the State Government chose to top up the Federal Government’s HomeBuilder scheme by $20,000 and increase the supply of social and affordable housing, both measures suggested in Property Council’s 7-Point-plan for economic recovery.
“We’re thrilled the State Government has adopted our suggestion to expand the existing 75 per cent off-the-plan transfer duty rebate to developments under construction, a measure that has been consistently advocated by Property Council WA,” Ms Brewer concluded.
The Federal Government’s HomeBuilder website including FAQ sheets is available here.
Further details about the State Government's Building Boost can be accessed here.