Builders, construction companies and developers have welcomed the Federal Government’s $25,000 HomeBuilder scheme as a stop-gap for the struggling industry and a “catalyst” for hesitant homeowners to take action in the COVID climate.
The government’s $680 million cash injection will give $25,000 to around 27,000 eligible home buyers and owner-occupiers between now and 31 December 2020, to boost the residential construction industry as it reels from coronavirus.
Recipients will be able to build a new home, buy an apartment off-the-plan for up to $750,000, or substantially renovate their existing homes within a project price range of $150,000 to $750,000, with a property value of no more than $1.5 million.
Income caps will apply, of $125,000 for singles and $200,000 for couples, and both first and subsequent home buyers are eligible.
In a press conference on Thursday, Prime Minister Scott Morrison said the scheme would provide a “tradie-led recovery” for the economy.
“If you’ve been putting off that renovation or new build, the extra $25,000 we’re putting on the table along with record low interest rates means now’s the time to get started,” Mr Morrison said.
Property developers have welcomed the short-term stimulus package as an opportunity for a cross-section of buyers and a jolt of momentum for the market.
Stephanie Vanin, general manager of residential sales at Stockland, said the early read from the house and land developer had been “really positive”.
“Given how important the property industry is to the economy, it’s pleasing because it’ll create more momentum in the market to drive economic growth,” Ms Vanin said.
“It’s going to give an opportunity for people who are looking for an affordable way into the market, and in a low interest rate environment, it’ll give that extra push.
“The fact it’s talking to more than first home buyers is positive, too. As long as we as an industry provide affordable options, and buyers have access to that, it’s a win-win for everybody.”
Paul Wolff, managing director of Porter Davis Homes, said he was “extremely excited” to see some urgency come back into the market, to counteract much of the “cold feet” experienced during the past few months.
“The grant opens up the market to a greater cost cross-section – from first home buyers then to subsequent buyers who can knock-down and rebuild or greenfield upgraders,” Mr Wolff said.
“We’ve got multiple opportunities where the grant could be used – particularly for people who were already in the pipeline to come back on board.
“The levels of interest during COVID were quite extraordinary; it’s a resilient market. [$25,000] is a sensible amount to offer – we need to consider what happens at the other end when the stimulus ends – and the eligibility ensures it’s helping the income earners who genuinely need it.”
Grant will get hesitant renovators “over the line”
Roby Sharon-Zipser, CEO of online tradie platform Hipages, told realestate.com.au the cash incentive was a “well considered” solution for both short and long-term issues, as the industry attempts to stabilise.
“The number of new construction dwellings was going to drop significantly this year, from about 180,000 to about 130,000, leaving around a third of the industry without work,” Mr Sharon-Zipser said.
“[The scheme] solves a short-term problem, until the economy and migration get back on track, but also longer-term it keeps apprentices in the job – keeping them trained and qualified for when things go back to normal.
“For Australians who probably would have put off the decision to build or renovate, it’s the thing that will get them over the line.
“A catalyst for turning aspiration into a reality, while supporting an industry that’s integral to the Australian economy.”
Jonathan Hayes, managing director of Tailored Construction Group, said the COVID isolation period sparked a flurry of enquiries from “cooped up” clients who were inspired to improve their homes while stuck in them.
“Those people are now ready to make something happen during the period when grants are available, so it will definitely give a push,” Mr Hayes said.
“[The incentives will] bring forward the work and builders as employers will start to see a difference in the work they can give, too.”
Tight timeframes could mean “missed opportunities”
Cameron Kusher, realestate.com.au’s executive manager of economic research, said the HomeBuilder scheme is “attractive” but the short time period could prove a crunch for interested applicants.
“It’s questionable as to how many people will meet the means testing requirements and be in a financial position to undertake such a large renovation,” Mr Kusher said.
“For major renovations we know that the decision-making process takes time, as does preparing plans and seeking council approval, so it’s likely that the short period of availability of the grants could mean many miss out on the opportunity.
“Renovators who had already started planning may be in a better position to make use of the scheme.
“Despite the scheme being quite attractive and only available for a short period of time creating a level of urgency, it is imperative that those accessing the scheme take their time to research builders and ensure they are using reputable builders/developers in order to ensure they are protecting their investment.”