Homebuilder scheme extended, price caps increased for Victorian and NSW properties

Industry groups have welcomed the federal government’s announcement it will extend the Homebuilder program for another three months and raise price caps for homes in Victoria and New South Wales to reflect higher property values in those states.

Treasure Josh Frydenberg and Housing Minister Michael Sukkar on Sunday announced the policy would be extended to the end of March, and support the construction or rebuilding of 15,000 more homes, bringing the total to 42,000 homes across Australia.

The federal government is extending its HomeBuilder program for a further three months.Credit:Paul Rovere

The government will raise the property price cap from $750,000 for eligible builds to $850,000 in Victoria and $950,000 in NSW, but decrease the value of grants to $15,000.

The HomeBuilder payment has pushed first-home purchases in Victoria beyond pre-pandemic levels, The Age revealed on Saturday.

More than 6800 Victorians have applied for HomeBuilder grants with more than 5560 intending to use the money to build new homes.

Mr Sukkar said the scheme had stimulated the economy during the pandemic, and kept tradies in work.

"There is no better proof of HomeBuilder’s success than the latest Housing Industry Association’s new home sales data, which shows sales are 31.6 per cent higher in the three months to October 2020 when compared with the same time last year," Mr Sukkar said.

Builders had been inundated by demand for new buildings, he said.

Labor's housing spokesman Jason Clare said the federal opposition had been calling for the scheme to be extended for months.

"These changes will help, but they are still not enough to stop the housing construction industry shrinking," he said.

"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.

"It is still too small to save all the jobs of the Australians who work in the residential construction industry."

Mr Frydenberg said the three-month extension would keep the pipeline of building work flowing into 2022.

"The jobs are coming back," he said. "You saw 178,000 jobs being created across the country over the last month. You've seen consumer confidence up in the living of the last 12 weeks, you've seen Australia's triple A credit rating being reaffirmed, you've heard from the governor of the Reserve Bank that the Morrison government's fiscal response is on the right track, and has been the right policy.

"So all these pieces are coming together in a much broader play from the Morrison government to create jobs and ensure we build that bridge to the other side of this crisis."

The Urban Development Institute of Australia and Property Council of Australia welcomed the extension.

UDIA national president Simon Basheer said the policy was a "proven winner".

"Housing and construction contribute 750,000 direct and indirect jobs to the nation, so it is well placed to fill the gap caused by border restrictions and slower population growth due to current immigration levels," he said.

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