The Homebuilder scheme will continue until the end of March in a bid to prevent a major decline in construction activity.
Starting in January the grant program will be tapered down to $15,000 and price caps in NSW will increase to $950,000 and Victoria to $850,000.
There is also an extension for valid licenses and registrations from 4 June to 29 November for builders and developers working on the project to be eligible for the grant scheme.
The extension comes at the eleventh hour of the program which was going to wrap up at the end of the year.
Preliminary data from the federal government shows Victorian residents have been most eager to use the scheme with 7,636 applications received by 20 November.
Preliminary Home Builder application data ^Source: Australian Government, The Treasury – as at 20 November 2020
Construction activity forecasts prior to this announcement show expected work would “fall off a cliff” and decline by as much as 40 per cent, according to Master Builders Australia.
A UDIA survey also showed 66 per cent of the industry expected a “significant drop in sales volumes in 2021”.
Treasurer Josh Frydenberg said the sector is worth $100 billion dollars a year to the Australian economy or around 5 per cent of GDP and employs more than a million people.
“The success of this program has not only meant an increase in work on the ground to keep the pipeline of construction flowing but it has also protected jobs in the construction sector as well as across the economy,” Frydenberg said.
Homebuilder changes ^Source: Australian Government, The Treasury – as at 20 November 2020
Property Council chief executive Ken Morrison said the boost for homes and jobs is much needed while the industry waits for a restart to immigration and population growth.
“HomeBuilder saved the
construction industry from falling off a cliff earlier this year. But with no substantial immigration likely next year, it makes sense to extend this economic bridge further,” Morrison said.
“This is a big win for hi-vis construction jobs across Australia and all the white collar jobs that support the sector.”
Urban Taskforce chief executive Tom Forrest said that many lament the length of time it took the government to respond to their concerns.
HomeBuilder scheme was limited in its original design because of the price caps that resulted in very limited applicability in the main markets, Sydney and Melbourne,” Forrest said.
“These changes should have been announced as part of the
New home sales have surged by 12 per cent according to the latest figures from the Housing Industry Association due to low rates, lending relaxation and the HomeBuilder stimulus.
This has also had a big impact on keeping house prices afloat with major banks scrapping forecasting made at the start of the pandemic.