Government set to unveil new homebuyer grants to boost residential construction

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on May 31, 2020
Government set to unveil new homebuyer grants to boost residential construction

Photo by Charles Deluvio on Unsplash

The Federal Government will reportedly unveil new homeowner grants to revive the residential construction sector in the wake of the COVID-19 pandemic.

Treasurer Josh Frydenberg is set to announce a new homebuyers scheme that will be available for everyone - not just first home buyers - to avoid a 50% drop in residential construction due to the COVID-19 pandemic.

Sky News political editor Andrew Clennell revealed today the stimulus package could be announced as early as this week.

"New homeowner grants are to be the next cab off the rank when it comes to federal government stimulus, with Treasurer Josh Frydenberg and Assistant Treasurer Michael Sukkar set to introduce them in a residential construction package to be announced as early as this week," Mr Clennell said, speaking on Sky News this morning.

"The states have introduced these measures before, usually $5,000 or $10,000 grants but traditionally they've only been for first home buyers.

"This will be across the board, not just for first home buyers as the government looks to prevent a 30 to 50 per cent drop in residential construction which would damage supply and housing affordability down the track."

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Lender

Variable
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    Variable
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    100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

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    Variable
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    Variable
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    • Low rate home loan with added benefits, add offset for 0.10%
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    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. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. 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 August 14, 2022. View disclaimer.

    Opposition treasury spokesman Jim Chalmers cautiously welcomed the news.

    “Let’s see what they announce during the news,” Dr Chalmers said, speaking on Sky News this morning.

    “Already, before the crisis, construction was relatively weak and homeownership was at 60-year lows, so we had a challenge there.

    “That challenge has been exacerbated by this coronavirus crisis. In two or three months, we are very worried that construction will fall off a cliff and that's why we have been making very constructive suggestions about what the government might do.

    “We want to make sure that their plan is comprehensive, and we hope that they pick up and run with some of the ideas that (Labor has) put on the table.”

    The residential construction industry has been hit hard by the pandemic, with the Housing Industry Association (HIA) forecasting a near 50% drop in new home building which could put half a million jobs at risk over the next year. 

    In recent weeks the property industry has been lobbying the government to provide much needed stimulus to the sector.

    The Property Council of Australia has proposed a $50,000 'New Home Boost' grant to purchasers of newly-built homes across the country. 

    Under the proposed scheme, the $50,000 grant would be limited to the first 50,000 purchasers of newly constructed homes. The grant would not have a property price cap and would be available to all types of buyers, not just first home buyers. 

    Master Builders Australia has also called on the government to introduce a $40,000 uncapped new home building grant, which would deliver an extra 14,000 new homes and restore most of the construction jobs that have been lost since the beginning of the pandemic.

    Denita Wawn, CEO of Master Builders said the construction industry had been once of the worst hit sectors by the pandemic.

    "We are seeking stimulus not subsidies from government, we want the National Cabinet to urgently implement this independently modelled stimulus package and establish a special task force to fast track commencement of construction activity,” Ms Wawn said. 

    "Building and construction is shaping up to be one of the industries worst hit in the long term by the COVID-19 economic crisis.

    "We know from previous downturns that it takes four times longer for our industry to recover than the rest of the economy." 




    Disclaimers

    The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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    author-avatar
    Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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