The new HomeBuilder grant will boost confidence, save jobs and provide incentives at “just the right time”, says the Property Council.
The $25,000 HomeBuilder grant, announced by the federal government last week, will be available for construction of new homes or substantial renovations for existing homes.
Eligible owner-occupiers must be Australian citizens, earn less than $200,000 per year per household and enter into a contract before 31 December 2020. Construction must be contracted to commence within three months of the contract date.
The grant is not restricted to first home buyers and will be available to most Australians, as 80 per cent of households earn $200,000 or less each year.
The home must be a principal place of residence – so investors can’t access the scheme. New homes can be valued up to $750,000 including land. Renovations of between $150,000 and $750,000 are eligible, but the dwelling cannot be worth more than $1.5 million before the renovation.
The HomeBuilder grant will complement existing state and territory first homeowner grants, stamp duty concessions and other schemes.
The announcement follows weeks of Property Council advocacy for a demand stimulus for the housing sector.
Property Council chief executive Ken Morrison says demand for new housing construction was “threatening to fall off a cliff over the next six months”.
“With weak consumer confidence and population growth, the industry needed a circuit breaker and this HomeBuilder program is very welcome,” Morrison says.
Morrison cautions that the scheme will provide limited support for new apartment construction, as building must commence within three months of contract signing.
The Property Council is now urging state and territory governments to strengthen the economic impact “by either topping up these grants or providing stamp duty relief for newly constructed dwellings,” Morrison explains.
Industry leaders are supportive of the federal government’s move.
Andrew Whitson, president of the Property Council’s Residential Development Council and CEO of Stockland Communities, has called the $25,000 grant is a “powerful stimulus measure” to “revive the Australian economy, support around a million construction jobs and directly help Australians realise their dream of home ownership”.
“Australia’s residential property sector generates over $100 billion annually for the economy and creates new homes and apartments is one of the most important job multipliers in the country,” Whitson says.
“The Australian Bureau of Statistics has established that every dollar spent on residential construction generates a three-dollar impact in the broader economy.”
Bruce Harper, general manager of AVID Property Group and president of the Property Council in Queensland, also welcomes the grant which will address the “looming cliff” as current projects are completed.
“This grant gives all buyers – not just first home buyers – the opportunity to build their assets.
“During this period of historically low interest rates, first homeowner grants and now this stimulus package, there’s never been a better time for homeowners to take advantage to get into the market, to upgrade or renovate,” Harper says.
Master Builders Australia CEO Denita Wawn says the scheme will be a “lifeline”.
“Based on the government’s estimated 27,000 grants, we think the scheme will be used for $10 billion in building activity, supporting the viability of 368,000 small builders and tradies – the businesses which employ 800,000 people in communities around Australia,” Wawn says.
Further information on the HomeBuilder program, including eligibility, can be found on the Treasury Coronavirus Economic Response website.