HomeBuilder sees development activity soar

The Federal Government’s HomeBuilder Grant has seen development and construction activity increase significantly with some members reporting a 400% increase in sales for house and land packages.

Projects broadly across the region are experiencing an increase in this demand. One member reports that sales have gone from 10 to 55 sales per month. Another member reports that they will deliver 70 allotments over the next six months where they were originally expected (prior to HomeBuilder being announced) to be delivered over 12-24 months.

What the Institute is seeing from members is that future stages and operational works intended for 2021 have been brought forward to meet the current demand for housing in the Townsville region.

Combining all of the applicable grants (First homeowners grant – $15,000, Regional home building boost grant – $5,000, and HomeBuilder grant – $25,000) $45,000 is available for eligible first home buyers.

Typically, buying a 4 bedroom house and land package for $400,000, with stamp duty exemptions, the total grants make over 11% of the purchase price. What our members are seeing is that mortgage repayments are either cheaper or at least in line with rental prices; enticing first home buyers to enter into the market.

To conceptualise the output, 500 sales over a typical $400,000 house and land package would equate to $200 million of building activity. Compared to previous slow 100 sales ($40 million), this means a $160 million boost into the Townsville economy.

HomeBuilder has seen impressive numbers and significantly increased construction activity keeping the region’s tradesmen working through the COVID-19 pandemic. The Institute is concerned that the industry cannot fully realise the benefits of the Homebuilder grant due to:

  • The uncertainty of meeting the 3 month eligibility criteria due to slow finance approvals
  • Lenders not accepting unregistered lots as part of the finance application,
  • The inflexibility to apply to built form products (apartments/townhouses).

The Institute will continue to work with UDIA National, the Commonwealth Government and the Office of State Revenue to seek to expand the HomeBuilder grant for home buyers.