The federal government has announced a new $700-million housing stimulus package aimed at rekindling property market activity.
A $25,000 grant will be available to owner-occupiers “substantially renovating” or building a new home from 4 June to 31 December 2020, as part of the Morrison government’s new $688-million HomeBuilder package.
A national price cap of $750,000 has been set for new home builds, and a renovation price range of $150,000 to $750,000 will apply to renovating an existing home with a current value of no more than $1.5 million.
Those building a new home must also commence construction within three months of the contract date.
The grants will also be means tested, with the government setting income caps of $125,000 for singles and $200,000 for couples. An applicant’s eligibility will be based on their latest assessable income.
The stimulus is designed to breathe life into the residential property market, which is facing a prolonged downturn off the back of the COVID-19 crisis.
The government estimates that approximately 27,000 grants would be handed out as part of the package across $10 billion in building projects, supporting 140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector.
The HomeBuilder program will be implemented via a National Partnership Agreement, signed by the Commonwealth and state and territory governments.
‘A lifeline for an industry facing a valley of death’
The stimulus has been welcomed by the property industry, which has been calling for fiscal support.
“HomeBuilder will be a lifeline for an industry facing a valley of death in the coming months,” Denita Wawn, CEO of Master Builders Australia, said.
“It will mean more new homes, more small businesses and jobs are protected and provide a stronger bridge to economic recovery for our country.”
Housing Industry Association (HIA) managing director Graham Wolfe added: “The HomeBuilder package will support the delivery of tens of thousands of new home and renovation projects.
“HIA estimates it could generate over $15 billion in national economic activity.
“Most importantly, this incentive will support hundreds of thousands of jobs across Australia.
He added: “The housing industry directly engages more than 1 million people – builders, trade contractors, designers, professional service providers and others. It provides jobs for many thousands more in the manufacturing and retail sectors, which supply the materials, products, white goods and furnishings that go into our homes.
“This incentive will help to address the projected decline in housing activity over the next 12 months.”