Homebuyers stuck in limbo due to unfinished houses have been thrown a lifeline, with West Australian (WA) government loans to help struggling builders complete projects.
The $10 million (US$6.7 million) program will provide interest-free loans of up to $300,000 (US$200,000) for builders with houses that have been under construction for more than two years.
Treasurer Rita Saffioti said that with a fast-growing population, housing remained a key issue in the state.
“There are hundreds of homes that are out there that are not being completed by builders leaving families stranded,” Ms. Saffioti told reporters on Jan. 4.
“Homeowners who are left in limbo living with family members (or) continuing to rent when they’ve got a property that they'd like to move into.”
Ms. Saffioti said the construction industry had experienced significant price hikes for skilled labour and building materials in the past few years.
That’s pushed up costs and delayed construction across the state, which has in turn prevented homebuyers from accessing their mortgages to make progress payments to their builders because milestones have not been met.
This has led to cash flow issues for many builders and “stranded” up to 600 homes, with no timeline for completion.
The loan facility is intended to stop more residential builders with cashflow problems from becoming insolvent and boost housing supply.
A maximum of $300,000 will be available to eligible builders, with up to $60,000 (US$40,000) per property to be provided in instalments.
An independent property adviser will oversee the progress of the projects and builders receiving taxpayer funds in a bid to have the projects finished within eight months.
Housing Industry Association WA executive director Michael McGowan said failed construction businesses damaged the building industry and the community.
“The builder and their family lose everything, trades and suppliers suffer losses, with consumers having to wait to restart the home building process,” Mr. McGowan said.
“The Builders’ Support Facility will hopefully minimise the number of people that have to go through this process.”
Opposition housing spokesman Steve Martin said it was too little and too late.
“This will do nothing for the hundreds of people who have half-built homes because their builder has already gone broke,” Mr. Martin said.
