As part of the efforts to ease the potential downturn in the construction sector due to the COVID-19 outbreak, the federal government has unveiled a new scheme that will provide assistance to homeowners who wish to rebuild or renovate their existing homes.
Under the HomeBuilder program, owner-occupiers can apply for a $25,000 grant for the construction of a new home or the renovation of an existing property. The program aims to provide 27,000 grants by December this year.
A statement from the Office of the Prime Minister said the program will be able to support 140,000 direct jobs and another 1,000,000 related jobs in the residential construction sector. This includes businesses and sole-trader builders, contractors, property developers, construction materials manufacturers, engineers, designers, and architects.
"This increase in residential construction will help to fill the gap in construction activity expected in the second half of 2020 due to the coronavirus pandemic," the statement read.
Simon Basheer, national president of the Urban Development Institute of Australia (UDIA), said the boost the program aims to provide to the construction industry will ultimately help the economy.
"The economic recovery will be swifter and stronger for having a housing and construction industry that is robust. The package will help pull forward activity that meets the challenges of the 'economic and jobs cliff' facing the industry in the second half of 2020," he said.
According to the statement of the prime minister, the HomeBuilder program complements the existing state and territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the First Home Loan Deposit Scheme and First Home Super Saver Scheme.
Adrian Kelly, president at the Real Estate Institute of Australia, said aside from the "massive boost" in employment, the scheme bridges the gaps of the earlier proposed schemes.
"It is the owner-occupier that decides how the extra dollars are to be spent, whether it is on a new build or a major renovation to their existing home. First home buyers can benefit by buying a property at the lower end of the market in a location they prefer and upgrade immediately," he said.
In an earlier report, Kelly called out proposed policies that aims to assist first-home buyers who are targeting new homes.
"To limit any assistance to first-home buyers to only new dwellings could lead to sub-optimal outcomes in the utilisation of existing property and infrastructure," he said.
Kelly said less than 20% of first-home buyers prefer to buy newly-constructed homes. He believes introducing a grant that limits their choice would only impede any potential activity in the housing market.
To know more about the scheme, check out this story from Your Mortgage.
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