The number of first home buyers has risen to an 11-year high as the federal government’s HomeBuilder scheme helps boost the number of people securing their piece of the property market.
The increase was more than 30 percent higher than in any pre-COVID month since 2009, when the Rudd government temporarily tripled the first home owners grant as part of an economic stimulus package for the Global Financial Crisis.
Amanda Seneviratne, head of finance and wealth at the ABS, said that commitments for the construction of new dwellings had risen 10.9 percent in October making them the most significant contribution to owner-occupier housing loans in Australia.
“Feedback from lenders was that there had been a large increase in first home buyers applying for these construction loans over the last few months,” Seneviratne said.
She added: “The value of construction loan commitments has risen by 65.6 per cent since July, which coincides with the June 2020 implementation of the Government’s HomeBuilder grant in response to COVID-19.”
About 24,000 Australians have taken up the grants which Treasury previously estimated would be taken up by 27,000 people by the end of the year; at the cost of $680 million.
“We know that owning your own home is one of the most effective ways for people to build household wealth to provide financial security during their working lives and their retirement. So extending HomeBuilder also provides huge long term benefits,” Wawn said
“HomeBuilder is a key part of my government’s Economic Recovery Plan for Australia. We’re keeping people in jobs and putting Australians’ dream homes within reach,” Prime Minister Scott Morrison said.
The grant does not just apply to first home buyers; however, construction must be contracted to commence within three months of the contract date. Income caps on applicants apply: singles who earn more than $125,000 and couples who earn more than $200,000 are not eligible for the scheme.
New home builds can not exceed a $750,000 cap, and renovations must cost between $125,000 and $750,000. Homes valued at more than $1.5 million are excluded.