Homebuilder grant starts to drive recovery but it needs more

New Australian Bureau of Statistics lending figures for July show that the HomeBuilder grant provided by the Federal Government has started to drive a recovery in loans being taken out for new home building and renovations.

“The 9% jump in the number of owner occupier loans for the building of new homes in the month is encouraging and shows the highly effective impact of HomeBuilding in activating demand,” Denita Wawn, CEO of Master Builders Australia said.

“However, the outlook for the industry and the economy in general is extremely grim and HomeBuilder should be extended for 12 months in the Federal Budget to help maintain a pipeline of work and be a lifeline for builders and tradies,” she said.

“The home renovations market also appears to be responding well to the roll out of HomeBuilder across the country. During July, the number of loans to owner occupiers for home alterations/additions experienced a 6.3% uplift compared with the previous month,” she said.

“Our latest forecasts estimate that HomeBuilder is likely to boost new home building commencements by almost 10,000 during 2020-21 but the sector still faces a forecast of 27% decline,” Denita Wawn said.

“The heavy interlinkage between construction and the wider Australia economy means that the economic benefits across a range of sectors will be even greater than a boost to residential building activity,” she said.