Property Australia

Extension to economic bullseye

Karen Jamal Karen Jamal April 19, 2021

The construction deadline for the federal government’s HomeBuilder program – dubbed an “economic bullseye” by the Property Council – has been extended by a year. What does this mean for the industry? 

 

  Three key takeways 

  • Applications for HomeBuilder closed on 31 March 2021, with more than 121,000 applications – four times higher than Treasury forecasts 
  • An extension to the construction deadline means grant recipients will now have 18 months to commence construction, a year longer than previously required 
  • Property Council chief executive Ken Morrison calls the extension a “common sense solution” that takes the pressure off homebuyers and home builders over the next few months. 

 

Ken Morrison joined federal treasurer Josh Frydenberg and minister for housing, Michael Sukkar, for the announcement of the extension to HomeBuilder’s construction deadline on the weekend. 

The Property Council has been a strong supporter of the scheme as a confidence stimulator and job saver in the residential construction sector. 

“Homebuilder has been an economic bullseye. It is one of the most successful economic stimulus measures ever undertaken by a federal government,” Morrison explains. 

HomeBuilder supported more than 121,000 households to build new homes or undertake substantial renovations. Treasury estimates HomeBuilder supported $18 billion worth of residential construction projects in 2020 alone. 

The initial $25,000 grant was available until December 2020. A scaled back grant of $15,000 from 1 January was contingent on work commencing within six months of the contract date. 

Treasurer Josh Frydenberg said the extension would “smooth out the HomeBuilder construction pipeline” while supporting jobs in the construction sector. 

The popularity of the scheme had led to concerns about construction delays. Housing commencements surged by 26.6 per cent in December, according to the Australian Bureau of Statistics. 

Denita Wawn, CEO of Master Builders Australia, says the scale of HomeBuilder “created huge pressure on the supply chain,” and its industry survey had found 70 per cent of builders were “being hit by delays and cost increases for key trades and building products”. 

HIA managing director Graham Wolfe says HomeBuilder” has created a lifeline of work for tradies and helped support tens of thousands of first home buyers to achieve their dream of owning a home”. 

Now, as HomeBuilder driven projects draw to a closeMorrison says “all eyes will now be on state and territory government efforts to keep employment and construction going in the apartment sector”. 

He also says governments must “focus on rekindling Australia’s traditional drivers of demand such as overseas migration”. 

Tags: RESIDENTIAL