Government is under mounting pressure to extend the Homebuilder scheme to be phased out by 31st December 2020. Data obtained from the treasury shows thousands of home builders have already applied for the grant to build or renovate the family homes. There are been an increase of home builders across the nation to capitalize on this offer.
According to treasury till the October 23rd over 14 599 have already applied for the grant. And, with the windows closing is sooner this number is set to soar in the coming weeks. Out of the 3111 are for new builds with Victoria and Queensland with 4118 and 2904 taking the most applications. New South Wales has only 1899 applications till October 23rd despite being the largest transaction on property numbers. Experts have narrowed down a few reasons being eligibility as this is only restricted to Australian Citizens not migrant with the permanent resident, average property price not exceeding the $750 000 for newly built and shortage of land.
Homebuilder grant provides $25,000 government grants are available for new home builds where the combined house and land value does not exceed $750,000. The grant is also available for renovations and knock-down rebuilds worth between $150,000 and $750,000 if the property’s existing value does not exceed $1.5 million. There are also income caps for the individual or couple applying and only applicable for Australian citizens.
The home builder scheme has provided a significant interest despite the slow growth due to the COVID-19 pandemic and economic slowdown. Australia’s biggest builder group Metricon has advised the past few months they have seen the biggest walks in their display house due to extensive marketing campaigns with homebuilder boost schemes. According to this Chief executive office Mario Baisin in all three eastern Australian states namely NSW, QLD, and Victoria.
Developers and industry bodies are lobbying to extend the scheme beyond this December. Yet, Government has not yet made any decision to extern the home builder grant beyond this year.
In recent times builders, developers, and real estate agents are heavily advertising the builder eligibility with their product to ramp up the inquiry. Despite, the scheme is nearing an end-all are optimistic the scheme will be extended to keep the demand for construction moving forward. The construction industry is related to over 12% of national employment and is vital for economic stimulus. It is understood the extension of the grant at the highest level of government has been considered as industry experts reveal. Federal Housing Minister Michael Sukkar has revealed its optimistic view with the current scheme said, “The current level of application show Homebuilder is off to a much stronger start than forecast”.
Within Sydney, there has been strong demand for eligible projects and a shortage od and supply to growth areas within Northwest and Southwest Sydney. It is estimated that about 10% of the Homebuilder only has been paid so far and others are still waiting for eligibility tests. Land developer states due to the short notice with Home Builders Scheme they were not been able to develop more land causing lower supply to meet the demand. Generally, land development tends to take 12-18 months and simply they were not able to offer products for the scheme leaving a big chunk of the potential customer not to be able to buy.
As with the pandemic future uncertainty is looming, lower economic activity predicted and lower expected population growth for next year industry is hoping for the extension of the home builder scheme to come in sooner than later.