Threat of HomeBuilder reduction leads to end-of-year rush

author-avatar By on January 20, 2021
Threat of HomeBuilder reduction leads to end-of-year rush

It appears the reduction in HomeBuilder from $25,000 to $15,000 led to an end-of-year push in applications for the Scheme.

In the new year, HomeBuilder was reduced from $25,000 to $15,000 for new builds and substantial renovations, with the threat of reduction providing the best stimulus.

The latest figures from the Housing Minister's office indicate more than 75,000 applications had been made for HomeBuilder.

These are applications and are subject to state government revisions, and are also not assessed for eligibility.

As of 4 December, only 32,000 applications had been received - 42,679 applications were apparently made in 27 days.

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The Government had initially budgeted for 27,000 applications, costing approximately $688 million.

Assuming all applications turn into grant-worthy construction starts, 75,143 applications would cost nearly $2 billion.

The latest Australian Bureau of Statistics (ABS) data for November - admittedly now out of date - show private sector housing built was 6.1% higher than October, with 11,489 dwellings approved.

Private sector housing, in original terms, was in large part boosted by Western Australia - up 209% since July - which has its own additional HomeBuilder grant, with eligible borrowers able to get up to $45,000 to put towards a new build.

In November, Queensland also led the charge in private housing approvals, up 17%.

It, too, has its own additional construction grants, with a focus on building in regional areas.

Further, the ABS numbers reveal approximately only 16% of renovations made in November would have been eligible for the HomeBuilder grant. 

Nonetheless, Housing Minister Michael Sukkar and various building associations have heaped praise on the HomeBuilder scheme. 

"It has kept hundreds of thousands of tradies in work who would have otherwise been facing the unemployment queue," Mr Sukkar said.

Master Builders Australia (MBA) chief Denita Wawn pointed to the "perfect storm" for home building.

"We’ve kept COVID-19 in good stead, we have very low interest rates, and people are not spending money on travel … there is excess capacity to spend," she told The Australian.

Housing Industry Australia's (HIA) new home sales report also indicates new home sales were at their second-strongest point in the 20-year history of the survey.

“This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the 31 December 2020 deadline to access the $25,000 grant," HIA economist Angela Lillicrap said.

“The extension of the timeframe to commence building from three months to six, which was announced in November, played a significant role in December’s results."

However, in November, Shadow Housing Minister Jason Clare was less optimistic about HomeBuilder after the extension was announced and the construction deadline was extended from three to six months.

"The Morrison spin machine says they are extending the HomeBuilder Scheme because it has been so successful. The fact is they have to extend it because the original scheme was too small and was badly designed," he said.

"According to work done by [MBA], this extension of the Scheme will only increase the number of homes built this financial year by up to 1,569."

Photo by Callum Hill on Unsplash


The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and

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.

In the interests of full disclosure,, Performance Drive and are part of the Firstmac Group. To read about how manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Harrison is's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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