Prime minister Scott Morrison has revealed a preliminary look at the government’s $688 million “home builder” plan.
The scheme will give $25,000 grants for residential renovations 4 June to 31 December. To qualify, unmarried applicants must earn less than $125,000 annually or $200,000 for a couple.
New residences carrying a value of $750,000 will qualify, as will renovations $150,000-$750,000 that—as a result of the renovation—will leave the property with a worth less than $1.5 million.
The prime minister stated that the six-month building support program will impel a “tradie-led” recovery, with the objective to construct 30,000 homes by the holiday season.
Morrison believes that the $25,000 grant will couple with record-setting low interest rates to provide for optimum homebuilding conditions.
The building business has been abuzz this week with construction stimulus theories—from dollar-for-dollar matches on renovation projects to a $20,000 payment for any homebuyer.
The government has not spoken on the topic of social and cost-efficient housing plans. Morrison says that the government has been examining the residential building sector, showing special interest in large scale projects and new residential builds in anticipation of a predicted dropoff in the homebuilding market.
Last Wednesday, treasurer Josh Frydenberg revealed that the nation had gone into a recession based on information supplied by the Treasury department.
Grattan Institute program director Brendan Coates stated that cash for social housing, as opposed to home buyers grants, was the key to building stimulus; handout projects that would inspire more homebuilding by prompting more people to commence with their house purchases.
He believes that farther reaching financial incentives will give grants to people who would have purchased a home under any conditions—pointing to as evidence industry forecasts predicting that 110,000 houses will be constructed in Australia in 2021. He says that awarding $20,000 to these home buyers would cost $2.2 billion without creating one construction job.
Coates stated that this would be passed onto home prices and a renovation boost would raise trade prices, as research indicated that home improvement levels were above pre-Covid-19 levels. He suggested that the Morrison government should replicated a GFC-era policy, the social housing initiative, through which 19,500 social housing units were constructed and another 80,000 refurbished during a two-year period, at a cost of $5.2 billion.
Through this initiative, he said, the federal government gave money to the states to construct social housing units, or to contract community housing suppliers to be housing developers.
He also asserts that state governments and community housing providers will not have to concern themselves with finance, marketing and sales; they will be empowered to start constructing homes faster than the private sector—resulting in a quick lift to the economy.