April 22 2021
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After time ran out on the federal government’s HomeBuilder stimulus measure, it was revealed over the weekend that the construction commencement requirement would be pushed out by a further 12 months.
A statement from federal Treasurer Josh Frydenberg and the Minister for Housing, Michael Sukkar, over the weekend indicated that the construction commencement requirement for HomeBuilder would be extended from six months to 18 months for all existing applicants.
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With more than 121,000 Australians having applied for the grant, which is expected to support around $30 billion of residential construction projects, the government has revealed it expects to be providing $2.5 billion in support to the construction sector.
According to Mr Sukkar, the decision to push out the construction commencement date by 12 months is in response to “unanticipated delays in the construction industry caused by COVID-19-related supply constraints including delays in global supply chains and recent natural disasters”.
Mr Frydenberg said that by extending the construction commencement requirement, it will “smooth out the HomeBuilder construction pipeline, support jobs in the construction sector, and ensure that existing applicants facing difficulties in starting construction on their new builds and renovations are not denied a HomeBuilder grant due to circumstances outside their control”.
After applications for the scheme closed last week, REB reported that the number of new home commencements had increased by more than 25 per cent to deliver a record-breaking December quarter in 2020.
That number is expected to peak again in mid-2021, according to the chief economist at the Housing Industry Association, Tim Reardon.
Since the application deadline closed — and the announcement of the construction commencement extension — both the Property Council of Australia and Master Builders Australia have expressed their support for the government’s COVID-19 response.
‘One of the most successful economic stimulus measures ever’
Property Council of Australia’s chief executive, Ken Morrison, said the extension “is a common-sense solution that takes the pressure off home buyers and home builders over the next few months”.
Calling HomeBuilder “an economic bull’s eye”, he commented: “It is one of the most successful economic stimulus measures ever undertaken by a federal government.”
But as stimulated demand does wind down, he cautioned that “we need governments to focus on rekindling Australia’s traditional drivers of demand such as overseas migration”.
“All eyes will now be on state and territory government efforts to keep employment and construction going in the apartment sector,” he added.
‘The valley of death’ that never eventuated
Master Builders Australia CEO Denita Wawn has also touted HomeBuilder as “one of the most effective government interventions ever”.
She said: “The federal government showed strong leadership to introduce HomeBuilder when COVID lockdowns meant thousands of builders and tradies faced a valley of death with no forward work.”
Applauding the extension of the commencement date, Ms Wawn said that the scale of HomeBuilder success — from more than 120,000 applications — had created “huge pressure on the supply chain”.
Citing a Master Builders Australia survey, seven in 10 builders have been hit by delays and cost increases for key trades and building products.
“This also created the risk that thousands of HomeBuilder applicants could miss out on the grants because builders could not meet the construction start date requirements,” she said.
Adding that “thousands of HomeBuilder applicants around the country can now breathe a huge sigh of relief”, Ms Wawn said the 12-month extension “will help builders and tradies maximise and manage the extraordinary success of HomeBuilder”.
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Source: Real Estate Business
Ormsby, G. (2021, April 19). HomeBuilder construction deadline given another 12 months. Real Estate Business - News for real estate professionals. https://www.realestatebusiness.com.au/breaking-news/21361-homebuilder-construction-deadline-given-another-12-months