Crucial change a win for house hunters
The Morrison Government's cash handout to stimulate property construction has been extended with a tweak to cap amounts for New South Wales and Victoria.
The Homebuilder scheme currently offers $25,000 to Australians committing to new builds or undertaking significant renovations and was due to expire on New Year's Eve.
This will now be extended to March 31 but at a lower rate of $15,000.
Another crucial amendment to the scheme will be the increased cap size for eligible home values in Sydney and Melbourne.
The handout was only offered to property owners whose homes were worth $750,000 or less, which meant a major portion of those in the country's two largest cities were excluded considering comparatively high house prices.
But the cap size has been increased in New South Wales and Victoria to $950,000 and $850,000 respectively for new builds.
The government has also extended the commencement window of the program from three months to six, meaning those waiting in line to get projects off the ground won't miss out on the $25,000.
Homeowners committing to a substantial renovation will continue to be eligible if their property is worth $1.5 million or less.
"One of the key drivers behind this extension is the Homebuilder program has been so successful," Housing Minister Michael Sukkar told reporters on Sunday.
"Builders were saying to us 'we might have to close off our books because there are so many customers and we can't guarantee them that we can start in another three month period'.
"So this extension today, obviously, gives builders additional time, which means they will be able to take on more contracts and put more people into homes."
Mr Sukkar said the uptake of the scheme had caught the government by surprise, meaning the initial $688 million uncapped scheme will blow out to an estimated $921 million.
But he said the initiative had delivered on its promise to support thousands of construction jobs during the coronavirus-induced economic crisis.
The Housing Minister said the scheme had been a $15 billion boon for the sector and another $6 billion was expected from its extension.
The update was welcomed by the property industry's peak body which hailed the stimulus as the most successful of its kind in two decades.
It claimed hundreds of thousands of Australians were able to keep their jobs because of the handout.
"Its extension will provide thousands more homes and tens of thousands more jobs while Australia prepares for a COVID safe restart to immigration and population growth," Property Council chief executive Ken Morrison said.
"Homebuilder saved the construction industry from falling off a cliff earlier this year. But with no substantial immigration likely next year, it makes sense to extend this economic bridge further."
Labor's housing spokesman Jason Clare said the Morrison Government should have committed to extending the program months ago.
"These changes will help, but they are still not enough to stop the housing construction industry shrinking," he said, according to The Sydney Morning Herald.
"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."
Originally published as Crucial change a win for house hunters