As reported by The Australian, final applications for the $15,000 HomeBuilder grant, which closed on Wednesday, exceeded 121,000, more than four times what Treasury had estimated at the scheme's inception in June. 

And according to The Australian, the government is considering another extension after its recent success. 

The scheme was forecast to be relatively cheap when first announced at $688 million, but has since ballooned out to $2.5 billion, and Treasury estimates it will fuel more than $20 billion in direct construction and housing investment. 

Building a home? The table below features construction home loans with some of the lowest interest rates on the market.

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Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.14% p.a.
6.20% p.a.
$2,047
Interest-only
Variable
$0
$835
70%
6.43% p.a.
6.68% p.a.
$2,143
Interest-only
Variable
$0
$530
90%
  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
6.43% p.a.
6.68% p.a.
$2,143
Interest-only
Variable
$0
$530
90%
6.45% p.a.
6.20% p.a.
$2,515
Principal & Interest
Variable
$0
$1,520
60%
6.74% p.a.
6.42% p.a.
$2,247
Interest-only
Variable
$0
$600
90%
6.92% p.a.
6.95% p.a.
$2,307
Interest-only
Variable
$0
$300
80%
6.94% p.a.
7.19% p.a.
$2,313
Interest-only
Variable
$0
$530
80%
7.09% p.a.
7.45% p.a.
$2,363
Interest-only
Variable
$0
$500
80%
7.81% p.a.
7.84% p.a.
$2,882
Principal & Interest
Variable
$0
$600
69.99%
8.29% p.a.
8.62% p.a.
$3,016
Principal & Interest
Variable
$0
$0
80%
8.56% p.a.
8.58% p.a.
$2,853
Interest-only
Variable
$0
$600
69.99%
8.68% p.a.
8.75% p.a.
$2,893
Interest-only
Variable
$0
$800
95%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

The grant was created in order to save the construction and housing industry from a pandemic-induced collapse, and is now reported to be one of the main drivers of economic recovery. 

Modelling estimates HomeBuilder has contributed $103 billion in economic activity, created and sustained around 340,000 jobs. and contributed more than 5 percentage points to the GDP. 

Around 40% of HomeBuilder applications were first home buyers, the strongest share of new dwelling commencements since the Global Financial Crisis. 

Figures from the Australian Bureau of Statistics (ABS) released on Wednesday revealed new home commencements increased by 26.6% in the December quarter. 

Minister for Housing Michael Sukkar said the delivery of these 33,761 dwellings was largely due to the success of HomeBuilder. 

“HomeBuilder has driven the highest level of new home commencements in more than 20 years," Mr Sukkar said. 

“This record level of new home construction is protecting the more than one million jobs reliant on a strong residential construction sector.”

Housing Industry Australia's (HIA) chief economist Tim Reardon said the number of new houses commenced in the December quarter was the second highest level on record. 

“This record level of investment in new home building occurred six months after the announcement of the HomeBuilder program. The increase in commencements occurred across all jurisdictions," Mr Reardon said. 

“The record volume of home building will continue to retain jobs and absorb workers from across the rest of the economy." 

Opposition calls for extension to commencement timelines 

Labor MP and Shadow Minister for Housing Jason Clare said the government needed to extend the scheme’s construction commencement time frame from six to twelve months to ensure applicants didn't miss out. 

"This would also help sustain work for the housing construction industry when it is expected to drop off next year," Mr Clare said. 

"Under the current HomeBuilder guidelines, construction must commence within six months of signing the contract.

"Shortages of supplies such as timber have caused significant delays for some home builders which could mean they won’t comply with the current HomeBuilder rules and miss out on receiving the grant." 

But Mr Reardon said it was unlikely we had yet seen the peak of building commencements. 

"We anticipate that commencements will reach a new peak in mid-2021. This will see a very strong level of building activity into the middle of 2022." 

Originally announced in June as a $25,000 grant, HomeBuilder was extended for three months in November, but reduced to a $15,000 grant. 

Image source: Twitter



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