The government announced the $688 million HomeBuilder program on Thursday after new figures revealed the country dipped into a recession for the first time in three decades.
The plan will be restricted to people on middle incomes and to new homes and major renovations valued between $150,000 to $750,000.
The pre-renovation value of the house must not exceed $1.5 million and excludes sheds, pools, granny flats and any other structures not attached to the property.
The temporary scheme that will last until the end of the year, aiming to build 30,000 homes by Christmas.
Construction of a new home or a substantial renovation must be contracted to begin within three months to prevent a rise in house prices.
The grants will be means tested, allowing singles who earned up to $125,000 the previous financial year and couples who earned up to $200,000 to access the scheme.
The scheme will work along existing state and territory first-home owner grants programs, stamp duty concessions and other grant schemes, including the federal government’s first-home loan deposit scheme and first-home super saver scheme.
The $1.5 million cap will exclude many inner Melbourne and Sydney homes as the median house price for each city sits at $918,350 and $1,168,806, respectively, Domain figures show.
Treasurer Josh Frydenberg said the package aimed to spark jobs and stimulus for the economy.
“There is a real hole in the housing sector as a result of the coronavirus,” he told ABC News Breakfast. “It’s a critically important sector to the economy overall; it contributes more than $100 billion to GDP.
“It is also employing hundreds of thousands of people as well, including sparkies and plumbers and carpenters, people we want to put back to work, to put them off the income supports that they have been getting through the crisis.”
Industry group the Housing Industry Association welcomed the government’s announcement. “The HomeBuilder package will support the delivery of tens of thousands of new home and renovation projects,” said managing director Graham Wolfe.
The association estimates the package could generate more than $15 billion in national economic activity. It also predicted the supply of new houses could drop to as low as 111,000 in 2020-21, 60,000 homes fewer than first forecast in February this year.
“This incentive will ensure that the significant contraction in new home building activity in 2020/21 is not realised. The package will see slabs poured in the second half of the year, meaning jobs are kept and houses built.”
Content from Domain