HomeBuilder extended, but reduced by $10,000 for 2021

Australians keen to build a new home have been given an extra three months to find a builder and sign a contract, but the federal government’s HomeBuilder grants have been cut to $15,000 if the contract is signed in 2021.

Prime Minister Scott Morrison and Housing Minister Michael Sukkar announced the extension over the weekend, with the additional time to allow for another 15,000 homes to be built or majorly renovated.

Around 27,000 home construction jobs have been supported by the grants to date.

Mr Morrison said it was critical the momentum in Australia’s economy was maintained.

“Extending HomeBuilder will mean a steady pipeline of construction activity to keep tradies on the tools,” Mr Morrison said.

The extension gives applicants until April 14 next year to access the grants, an extension of three months past the previous December 31 expiry date.

HomeBuilder’s construction commencement deadline has been extended by three months, for all contracts signed after June 4.

The grant has been cut from $25,000 to $15,000, however, for new build contracts signed between January 1 and March 31.

Property price caps have been increased to $950,000 in New South Wales and $850,000 in Victoria, while remaining at $750,000 in all other states and territories.

The extension comes after revelations last week that Queensland’s building industry was at capacity, with builders having to turn away buyers because they couldn’t keep pace with demand. 

It also follows Western Australia’s state government providing a similar extension to the contract commencement timeframe earlier this month. 

Master Builders Australia chief executive Denita Wawn, who has been campaigning for a change for several months, described the extension as a “giant leap forward towards economic recovery.”

“It will generate billions in economic activity, help save thousands of builder and tradie businesses from going under and protect thousands more jobs in the building supply chain,” Ms Wawn said.

Ms Wawn said an important aspect of the extension was the creation of a pipeline of work for commercial construction businesses that build high-rise apartments and medium-density projects.

“Our forecasts show that their forward work is about to fall off a cliff, with apartment construction facing a massive 40 per cent drop,” she said.

“The HomeBuilder grants are also the leg up that thousands of Aussies need to help them overcome the daunting deposit gap and get themselves into the housing market.”

Housing Industry Association managing director Graham Wolfe also said it was pleasing that government had heeded the advice of industry on the extension.

“HIA’s forecasts predicted a significant drop in housing demand in 2021 as HomeBuilder projects finished,” Mr Wolfe said.

“This extension will ensure that the demand is carried forward to 2021 and activity will continue throughout the year.”

Mr Wolfe said the adjustments to the price caps in NSW and Victoria would help attract additional buyers to the scheme.

“Combined with the critical additional time to commence for both new and current applicants, giving builders six months from signing a contract to start work, HIA expects the take up of the grant will remain strong.”