24/07/2020 - 15:49

Housing package tweak

24/07/2020 - 15:49

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The state government has announced changes to the construction commencement criteria of its Building Bonus stimulus package, off the back of a 211 per cent increase in sales in June.

Housing package tweak
The change follows a more than 200 per cent increase in sales from May to June in WA. Photo: Gabriel Oliveira

The state government has announced changes to the construction commencement criteria of its Building Bonus stimulus package, off the back of a 211 per cent increase in sales in June. 

The $20,000 Building Bonus grant was unveiled at the beginning of June, following the federal government’s announcement of the $25,000 HomeBuilder package.

Contracts for the grants must be entered into between June 4, 2020 and December 31, 2020.

Eligibility criteria apply to each grant and contract type, including the requirement to commence construction within six months of the contract date for the Building Bonus grant and within three months of the contract date for the HomeBuilder grant.

Housing Industry Association WA executive director Cath Hart welcomed the move and said it aligned the construction commencement definition with other states.  

“It brings the definition to commencement which was laying a slab, in line with South Australia which is significant earthworks… you still have to lay the slab but not within the six months of signing the building contract so it smooths out the workflow,” Ms Hart told Business News.

“Ultimately what it means is that industry can ramp up its capacity in a safe way – so we’ve got time to train people, or those coming back into industry after a few years, but most importantly it means the consumers that apply for these grants will be more likely to get them.

“Previously, if a consumer didn’t get a slab down within time frame they wouldn’t get up to $45,000 across both grants. 

“Because we’re coming off historic lows (market activity) this makes it a bit safer.”

For new builds this will mean people will be eligible to receive the grant when significant earthworks, excavation or physical building work commence.

The change follows a more than 200 per cent increase in sales from May to June in WA, with industry facing significant pressures to respond to the surge in demand.  

Finance minister Ben Wyatt said the change to the commencement definition would ensure the safety of the housing and construction industry's workforce and the integrity of the new build.

"This will also provide greater opportunity for people to access the grants and build within the state,” he said.

"The McGowan government's priority is to secure an ongoing pipeline of work for Western Australian businesses, stimulate the economy and create WA jobs.”

Ms Hart added that the changes were sensible and would protect jobs and worker safety, while ensuring the maximum number of consumers were able to secure the grants.

“The objectives of these schemes is to protect and create jobs so we’re pleased the government has worked with industry on these changes so we can all achieve this goal.

Ms Hart said there was a huge surge in consumer interest after the schemes were announced in early June, with visits to display homes jumped by more than 100 per cent and inquiries about building rose more than 70 per cent.

“This interest converted into the highest level of sales seen in years, with HIA New Home Sales figures for WA showing an extraordinary 211% increase in sales from May to June,” Ms Hart said.

“This means that construction activity over the coming 6-12 months will be in line with, or higher than pre-COVID levels.

“However, given that activity in WA’s residential building sector has been so depressed for the past five years, this surge meant industry has had to quickly scale up capacity from historic lows to historic highs.

“The key pinch points have been around availability of particular trades including plumbers and concreters who are needed to lay slabs, as well as titled land - prior to the announcements, both had fallen to some of the lowest points seen in a decade.

“As such, HIA sought changes to some aspects of the scheme so that industry can scale up capacity in a way that is safe and sustainable for workers and businesses across WA’s residential building supply chain.”

The state government also released a joint application form for the Building Bonus and HomeBuilder grants today.

Read more about the impact of the government housing stimulus packages on the property market in the next magazine edition of Business News, out Monday.

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