The Federal Government's HomeBuilder Scheme ends March 31, and experts are tipping applications to skyrocket before then.
The scheme was initially due to end in January but was extended with a decreased grant from $25,000 to $15,000, while the timeframe for construction to be started was extended from three months to six months.
However, even with this extended timeline there are fears applicants could miss out due to a shortage of tradespeople and available materials.
Looking to compare low-rate home loans for your new build? Below are a handful of low-rate construction loans in the market.
Lender | Advertised rate | Comparison rate* | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDGET A DISCOUNTED GREEN RATE | Green Construction Home Loan (Interest Only)
| ||||||||||||
Green Construction Home Loan (Interest Only)
| |||||||||||||
| Variable | More details | ||||||||||||
| FEATUREDFREE REDRAW FACILITY | Basic Home Loan (Principal and Interest) (LVR 70%-80%) | ||||||||||||
| Variable | More details | ||||||||||||
| AN EASY ONLINE APPLICATION | Yard Investment Loan (Principal and Interest) (LVR < 80%)
| ||||||||||||
| Variable | More details | ||||||||||||
Rocket Repay Home Loan (Interest Only) | |||||||||||||
| Variable | More details | ||||||||||||
Standard Variable Home Loan (Interest Only) | |||||||||||||
| Variable | More details | ||||||||||||
Standard Variable Home Loan (Interest Only) | |||||||||||||
| Variable | More details | ||||||||||||
Standard Variable Rate Home Loan (Principal & Interest) | |||||||||||||
| Variable | More details | ||||||||||||
| FEATUREDFAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS | Basic Investment Loan (Principal and Interest) (LVR < 60%) | ||||||||||||
- Interest Only during construction
- No monthly, annual or ongoing fees
- Get Australia’s lowest rate construction loan when you go green
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 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 January 21, 2022. View disclaimer.
According to Master Builders, the timeframe to get timber in Western Australia prior to HomeBuilder was a week, but this had ballooned out to six weeks since the scheme began.
Commissioner of State Revenue WA Nicki Godecke said while only two HomeBuilder applicants had been rejected due to not meeting the timeline, this may change as the scheme came to a close.
"It is likely more applications lodged towards the end of 2020 will now be approaching the cut-off for construction to commence and will not meet the six-month commencement date requirement," Ms Godecke told the ABC.
Federal Member for O'Connor Rick Wilson said the federal government would be flexible on a discretionary basis if required.
"I don't think there's any appetite within the government or treasury to say, 'You're one day over the six months so we're not going to allow you to receive the subsidy'," Mr Wilson said.
"I'm sure there will be a bit of leeway to allow people to press ahead and get their projects underway."
Related: How to finance your HomeBuilder construction.
Mark Bernberg, sales director at Sydney-based property developer ALAND, said half of their 700 projects since June had been via people taking advantage of HomeBuilder, and was expecting March to be one of their busiest months since the scheme started.
“Last weekend was extremely busy with over 65 sales made on new properties,” Mr Bernberg said.
“We expect a similar result this weekend, as first home buyers rush to get into the market before the scheme ends.”
In addition to the HomeBuilder grant, first home buyers in Sydney can take advantage of the $10,000 first home owners grant plus stamp duty concessions worth almost $30,000 on a build worth less than $750,000.
HomeBuilder frenzy to be seen in March
According to the Housing Industry Association (HIA), the number of construction loans to owner-occupiers rose by 60.5% in the three months to February.
HIA economist Angela Lillicrap said she expected a surge in sales in March as HomeBuilder ended, but this wouldn't be as great as the near record volume of new home sales seen in December.
“The full impact of the extension of the HomeBuilder grant, at a value of $15,000, will not be observed until the end of March," Ms Lillicrap said.
“To receive the HomeBuilder grant, construction is required to commence within six months of signing a contract to build.
"As a consequence, it is possible that builders will delay the signing of some contracts to allow for greater flexibility and more detailed planning of projects."
Those looking to try and take advantage of the HomeBuilder scheme before its March 31 deadline are advised to consult their relevant State government website.
Photo by Brett Jordan on Unsplash
