Record-low interest rates, the HomeBuilder grants and the “lower for longer” environment will continue to make home ownership a proposition in the long term, says the Residential Development Council’s division president, Andrew Whitson.
Housing construction is the engine of the economy, with every dollar invested generating $3. This makes residential construction a “powerful stimulus measure”, says Whitson, CEO of communities for Stockland.
The federal government’s HomeBuilder grant, announced in early June, provides eligible owner-occupiers, including first home buyers, with $25,000 to build a new home or substantially renovate an existing home.
Whitson says the grant is already “helping to revive our economy, support around a million construction jobs across the country and helping more Australians realise their dream of home ownership”.
The federal government expects to provide around 27,000 grants at a total cost of around $680 million.
“The Residential Development Council worked hard to make the case for a package to stimulate the housing market, and the response from the federal government demonstrates the critical role our sector plays in the economy.
“We’ve seen strong levels of enquiry since the announcement,” Whitson adds.
According to Housing Industry Association analysis, new home sales have risen by 64.4 per cent compared to two months prior to the introduction of HomeBuilder.
Coupled with existing state homebuyer grants – such as in Western Australia, where first home buyers can now access up to $60,000 between state and federal grants – the industry is “seeing compelling signs that the support is directly helping more Australians purchase their own home”.
“Many customers are telling us the extra help is enabling them to get into the market ahead of their planned schedule.”
Whitson says Stockland is fast-tracking the release of titled land, as are other members of the Residential Development Council.
AVID Property Group has accelerated the launch of land at its Harmony community on the Sunshine Coast in response to market demand. General manager Bruce Harper has noted that the HomeBuilder grant “is causing a rush amongst those keen to get a foot on the property ladder or secure a new home”.
Satterley’s general manager for Victoria and Queensland, Jack Hoffmann, says the government incentive has made a noticeable difference in the market – with a 50 per cent increase in enquiries as soon as the scheme was announced.
“The grant removes some of the uncertainty by providing a financial boost to individuals and families, and that’s led to an immediate jump in enquiries,” he says.
While the pandemic is driving a current preference towards larger detached homes and townhouses with outdoor spaces, Whitson is confident the long-term urbanisation trend will prevail.
“People – particularly millennials and the younger generations – will still want to live in cities. So, while we’re currently seeing customers preference larger homes that might be a bit further from the city, with home offices and more generous outdoor spaces, I think over the coming years apartments will become more attractive again.”
The fundamentals of good design remain important for all customers, Whitson emphasises. This extends beyond the front door, and to surrounding amenity like outdoor spaces, shops and cafés, parks and exercise tracks.
While the industry rides the waves of disruption in 2020, Whitson says the signposts point to a positive future.
“Australia is a fantastic place to live and remains attractive across the globe. I have confidence that we’ll emerge from this pandemic and when the borders reopen, we’ll see a return to population growth which has been one of the long-term drivers of the Australian housing market,” Whitson says.
“I don’t see the Great Australian Dream changing too much.”