Industry welcomes HomeBuilder scheme

The federal government has launched a new $25,000 HomeBuilder grant, to go towards new builds or renovating an existing home, as the Western Australian government prepares to announce its own package in coming days. 

House-and-land packages worth up to $750,000, and renovations valued at $150,000 or more, will be eligible for the $688 million HomeBuilder program.

However, the grants are restricted to people earning less than $125,000 a year or $200,000 per couple.

Prime Minister Scott Morrison has since come under fire for the ‘$150,000 or more’ component attached to the renovations part of the package, but has defended the decision.

“Not everybody can go and build a new home,” Mr Morrison said in an interview.

“If you’re a young family that’s bursting at the seams and you can’t afford to do that or … (going) through the whole process of selling and buying, particularly at the moment when they might be a bit nervous, the only option you’ve got is to do a pretty substantive reno.

“Whether you're spending money on a renovation or you're building a home, what this is about is the jobs of the people who work on those projects.”

Premier Mark McGowan has hinted that the state government planned to unveil its own package within days.

“This is a good initiative, the housing sector has done it tough and clearly employs hundreds of thousands of Australians,” Mr McGowan told reporters today.

“Now we understand the details of what exactly the Commonwealth is doing, we will work on what our package will be. We expect we will make an announcement in coming days.”

While property groups have welcomed the federal government’s HomeBuilder scheme, not all industries are fans. 

Master Builders Association of WA executive director John Gelavis said the scheme followed the association’s three-month advocacy campaign to save jobs and recharge building activity.

He said more than 80 per cent of households had income of $200,000 or less and that the eligibility criteria meant the vast majority of Australians would be able to access the scheme.

“The government has listened to Master Builders call for HomeBuilder to include grants for both new home builds and renovations. EY modelling commissioned by Master Builders shows that this stimulus mix will deliver the best return on investment for taxpayers,” Mr Gelavis said.

“The scheme is structured to get building activity going immediately and to provide safeguards around quality and consumer protection.

“Renovations or building work must be undertaken by a registered or licensed building service 'contractor' and named as a builder on the building licence or permit. They must have held the building licence or endorsed contractor licence before the date of announcement.”

Mr Gelavis said a survey of MBA WA members in April indicated that about three-quarters of its members reported a 40 per cent decline in their pipeline of work.

“The building industry leading the recovery is great for the state economy because that money that is spent by the builder, the tradie, and manufacturers and suppliers who are in the industry will spread across the state economy - they’ll be going out for dinner and spending the money within the community, which is what we want,” he said.

Housing Industry Association of WA executive director Cath Hart said the package, plus the imminent announcement of further support from the state government, would protect jobs and businesses across the home building supply chain by generating much-needed activity in the coming months.

She said the biggest win for her was the support for new homes, which would stimulate activity across lots of different building trades. 

“We often say we’re different in the west, but with the shortest home building project pipeline in the country, we really do appreciate the federal government hearing our call to bring forward this initiative to support WA’s residential building sector,” Ms Hart said.

HIA had revised down its forecast for new dwelling commencements in WA for 2020-21 in the wake of COVID-19 to just 9,730 starts across detached dwellings and multi-units. 

“WA had already just been through among the toughest five years on record so we only had a 13-week project pipeline when COVID-19 hit — we expected most of those slabs to be down by the end of this month, so today’s announcement couldn’t come soon enough,” Ms Hart said.

“We have been staring down the barrel of the toughest 12 months in history after the initial shock of the global pandemic saw WA’s home building pipeline contract by about 50 per cent as sales fell and existing jobs were put on hold.”

The Urban Development Institute of Australia WA chief executive Tanya Steinbeck said the package would help keep the property and construction sectors alive.

“Here in WA, the property and construction sectors represent 15 per cent of employment and around 10 per cent of gross state product,” she said.

“Without a pipeline of new homes being built, we would see a significant decline in jobs for a range of people including tradies, salespeople, planners, engineers, marketers and more.

“It is critical that our industry is supported in order to keep the engine room of our economy going.

“I am pleased that the federal government have listened to our concerns as an industry and taken steps to address the impending downturn.”

Ms Steinbeck said UDIA WA had also been working closely with the state government on a similar housing stimulus in WA and looked forward to receiving details of the finalised package.

Missing the mark?

Other industry groups have been quick to criticism the scheme, including the St Vincent de Paul Society which has said the package "misses the mark."

While the St Vincent de Paul Society National Council acknowledged the leadership of the Prime Minister and the national cabinet in continuing to navigate Australia through the COVID-19 pandemic, it is disappointed that "not one cent of the Australian Government’s $688million HomeBuilder package will go towards strengthening social housing."

"Investing in social housing would have delivered long-term good will beyond the pandemic," it said in a statement issued today. 

Chief executive Toby O'Connor said the Society had been advocating for the past four years for a Social and Affordable Housing Fund and the development of a National Housing Plan.

‘We’ve been going backwards on the social housing front for the last 15 to 20 years. No national government has demonstrated leadership," he said. 

"Right now, there’s an estimated shortfall of at least 438,000 dwellings and that’s before the anticipated COVID-19 recession fully hits and unemployment peaks in the next few months."

"We believe the government can do better. It can boost economic activity in the building sector and address the chronic shortage of social housing at the same time."