HomeBuilder criteria to limit renovation grants
A very small percentage of eligible households are likely to take up $25,000 renovation grants under the federal government’s HomeBuilder scheme, with new research by CoreLogic laying bare the limitations of its strict eligibility criteria.
CoreLogic this week released an extensive set of data on which regions had the most eligible houses for the HomeBuilder renovations stimulus.
The research found, however, that the extensive eligibility criteria would likely result in few households taking up the grant.
To qualify for a $25,000 grant, the renovation has to be worth $150,000 or more, the house and land must not be valued at more than $1.5 million upon completion and individuals must have income of less than $125,000 per year, while couples are required to earn less than $200,000 per annum.
Regions in Melbourne made up four of the top 10 locations for eligible properties, CoreLogic said.
Melbourne’s South East has the most eligible properties, with 157,364 homes worth less than $1.5 million and 93.7 per cent of households earning less than $200,000.
Perth’s North West was next, with 145,889 properties meeting the criteria, while 88.5 per cent of households were estimated to meet the income criteria.
No Sydney suburbs were listed in the top 10 regions, with most properties in the Northern Beaches and eastern suburbs areas surpassing the $1.5 million property value cap.
The bottom ten regions of eligible homes were either outback areas, where there are few properties, and more expensive suburbs such as the Sydney regions.
CoreLogic estimated there are about 4.4 million owner-occupied properties in Australia with a valuation of under $1.5 million, but federal government expectations are for just 7,000 renovations to occur.
“While part of this is the income cap put on the scheme, it is also due to the high value of renovations that is set in the eligibility criteria,” CoreLogic head of research Eliza Owen said.
“For areas where dwelling prices and incomes are relatively low, this may lead to owners over-capitalising on renovations, where they cannot recoup the cost of upgrades to the property."