On 29th November 2020, the Federal Government decided to extend the HomeBuilder program, allowing it to run until 31st March 2021. The decision was made based on how highly effective the HomeBuilder program is in driving demand to the construction sector, thus protecting jobs by supporting the construction of new homes and home renovations.
The HomeBuilder scheme currently provides $25,000 grants to eligible people building a new home or renovating an existing one.
The policy would be extended to the end of March, and support the construction or rebuilding of 15,000 more homes, bringing the total to 42,000 homes across Australia.
The government will raise the property price cap for eligible builds from $750,000 to $850,000 in Victoria and $950,000 in NSW, but decrease the value of grants to $15,000.
The amount of time all approved applicants who signed contracts on or after June 4, 2020, are given to start construction will also be extended, from three months to six months.
The decision follows calls from the construction industry for more flexible deadlines, with concerns people could miss out due to a bottleneck of applications.
Of the around 24,000 applications made to the scheme so far, the majority (19,180) are for new builds while the rest (4,697) are for renovations.
The HomeBuilder extension builds upon the extension of the First Home Loan Deposit Scheme announced in the Federal Budget 2020, which delivered 10,000 guaranteed loans to allow first home buyers to obtain a loan to build a new home, or purchase a newly built home, with a deposit of as little as 5.0%.
This gives first home buyers more confidence to enter the market, particularly as both the HomeBuilder program and First Home Loan Deposit Scheme can be accessed independently and in conjunction with virtually any State Government level first home buyer initiatives. Together this creates an extremely attractive package to allow first home buyers to enter the market, which will have a flow-on effect on the construction industry.
Housing Industry Association (HIA) managing director Graham Wolfe said the extension would bring certainty and stability that would ensure demand was carried forward to 2021. HIA predicts that the extended HomeBuilder will generate an additional $6 billion in construction work, boosting economic activity and supporting hundreds of thousands of workers directly up and down the supply chain.