The full details of the Government’s new HomeBuilder grant have only just been revealed – but it’s already being slammed by critics who claim those who need it most will miss out.
In a nutshell, the scheme will offer $25,000 payments to eligible Aussies to be spent on building new homes or substantially renovating existing properties.
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It has been designed to help Australia’s economic recovery post-COVID-19 and specifically to secure tradie jobs and prop up the construction industry, which is facing a steep decline in the months ahead.
But the stimulus package comes with a raft of caveats – which means there are many groups who won’t get a cent.
EXACTLY WHO GETS IT?
The $688 million HomeBuilder program will be available to Aussies who are building a new home worth less than $750,000.
It can also be put towards renovations worth between $150,000 and $750,000 that will result in the property being priced at $1.5 million or less.
The cash can’t be used on investment properties or to construct things outside the house such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages, and the work must be carried out by a licensed builder.
It will be means-tested and you will only be available to singles who earn less than $125,00 a year or $200,000 per couple.
Prime Minister Scott Morrison is spruiking the scheme as a way to “keep the dream” of home ownership alive for citizens as well as salvaging tradie jobs and giving the “important” construction industry a helping hand.
It also has the backing of many industry groups, with Property Investment Professionals of Australia chairman Peter Koulizos welcomed the Federal Government’s HomeBuilder scheme, claiming it will help individuals and the industry as a whole.
“The Federal Government’s HomeBuilder scheme will be a welcome shot-in-the-arm for the construction section over the next six months,” Mr Koulizos said.
“Not only will it help more first homebuyers into the property market, but it will also allow current homeowners to upgrade to a new dwelling or to update their current home, which can improve their financial futures.”
Real Estate Institute of Australia President Adrian Kelly also welcomed it.
“The REIA believes that the Federal Government’s announcement of the HomeBuilder scheme today will be a massive boost to the employment of home builders and their tradesmen at a time when a major driver of economic activity was stalling,” he said.
“Importantly, it is the owner-occupier that decides how the extra dollars are to be spent, whether it is on a new build or a major renovation to their existing home. This alleviates the concerns that the REIA had with a scheme that was only assisting new dwellings.”
“First homebuyers can benefit by buying a property at the lower end of the market in a location they prefer and upgrade immediately.”
However, it has sparked fierce backlash from many everyday Aussies.
Scores have taken to social media to slam the policy, claiming it is too restrictive to benefit those that need it the most.
In fact, many are convinced it will actually help those who are already comfortable.
Scott Langford, CEO of St George Community Housing, NSW’s largest community housing provider, said the handouts “were not the answer”, arguing there would be greater benefits if the money was put towards social housing.
“Social and affordable housing is not just bricks and mortar, it is essential infrastructure for a well-functioning society and economy,” Mr Langford said.
“We look forward to the detail of the announcement of the Government’s HomeBuilder stimulus package to see if it could be expanded to offer opportunities for community housing providers to leverage funding for maintenance upgrades, and we remain optimistic that the Government recognises the burgeoning opportunity to innovate in the form of infrastructure investment.
“With Australia now officially in recession, our Government can’t ignore those most vulnerable in social housing, and those key workers in affordable housing who have battled tirelessly on the frontline during COVID-19.”
He said now was the time for the Government and the private sector to work collaboratively to “invest in and improve” our social housing infrastructure.
“We are keen to see a willingness from Government to work with providers like SGCH to develop an investment proposition that attracts private capital, creating a multiplier effect,” he said.
“This is a once in a lifetime opportunity for investors and the fundamentals are in place to attract institutional investors supported by their own investors with a strong social conscience. “Social housing as an asset class offers the benefits of low-volatility, long-term demand and is highly regulated. If Government gets the settings right, Australian private capital, including our $3 trillion super funds and other larger institutional investors, will have an opportunity to invest in this valuable social infrastructure.”
Lynette Manciameli, director of NSW builder broker Builder Finders, has also warned the HomeBuilder scheme is at risk of being exploited by unscrupulous builders which could see a repeat of the pink batts disaster following the GFC.
“As we saw with the pink batts disaster following the GFC, even the best laid plans can have unintended consequences. Incentivised by the opportunity to make quick cash, several irresponsible operators delivered substandard work, scammed unwitting customers or placed untrained young workers at risk,” she said.
“What we are likely to see off the back of the HomeBuilder scheme is dodgy builders coming out of the woodwork. This is bad news for the consumer and bad news for the many reputable builders who are doing the right thing.”