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HomeBuilder grant prompts rush of land releases

PHOTO: Brent Hailey says Orchard Property Group has fast tracked construction at its Aurora project near Ipswich. Photo: Orchard Property Group


The Federal Government’s $25,000 handout to those building a new home has prompted major developers to bring forward land releases in a bid to capitalise on the rush of first-time buyers looking for a discount.

Builders are experiencing a major spike in sales following the announcement of the $688 million HomeBuilder program.

The scheme was announced in early June to stimulate the industry after the impacts of COVID-19. It gives eligible homeowners or first home buyers a cash grant of $25,000 to build new homes up to the value of $750,000 or to assist with renovations. The grant is running until December 31.

Developers have responded to the heightened demand by releasing land packages earlier than planned.

AVID Property Group was among those that hastened the launch of land, with its Harmony community on the Sunshine Coast brought forward. To meet the increasing demand for housing on the Coast, they fast-tracked the release of 33 blocks of land.

AVID’s general manager Queensland Bruce Harper said the introduction of the HomeBuilder Grant on top of already increasing market confidence was bringing in unprecedented enquiries.


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“The HomeBuilder Grant is causing a rush amongst those keen to get a foot on the property ladder or secure a new home,” Mr Harper said.

“We have seen a substantial increase in enquiries and buyers coming through Harmony’s second display home village in the last few weeks as restrictions have started easing, and we expect this to rise.”

With demand for titled land soaring and some developers reporting a threefold increase in sales since the scheme was announced, concerns have been raised that developers may release more supply than the market can handle.

The government’s ability to issue developers land titles in time for packages to be rolled out is also under the microscope.

Cedar Woods chief financial officer Leon Hanrahan said that while there was a limited amount of titled land available now, developers have the capacity to bring in more stock during the six-month duration of the scheme.

“The grant is running until December 31, so that’s a sufficient time to deliver more titled stock,” Mr Hanrahan said.

“Once titled lots sell out, developers will start selling stock off the plan, if you like.

“The scheme is not constrained by the shortage of available titled stock today because there is time to bring on more stock.”

Denita Wawn, CEO of Master Builders Australia, told Australian Property Investor Magazine that there may well be problems “in the not too distant future” but dismissed concerns about oversupply affecting the market.

“There may be administrative bottlenecks, particularly where state and territory governments have released complementary housing grant schemes to HomeBuilder,” Ms Wawn said.

“Local councils will need to cut the red tape that is too often endemic in that tier of government so that there is sufficient titled land and approvals to meet the HomeBuilder deadline.

“Having said that, there is built-in flexibility in the federal/state HomeBuilder agreements for state and territory jurisdiction to extend the deadline, as the Victorian Government has just done.”

Building jobs 

The economic shutdown had threatened to slash new home builds from the average 175,000 a year to as low as 100,000 because of the COVID-19 shutdown.

“Builders (who) have been doing it tough for years say they have had the best month in terms of sales since the GFC,” Ms Wawn said.

“State and local governments need to get cracking getting HomeBuilder applications processes up and running, fast-tracking land releases, land titles and planning approvals so we can get more people into their own home and keep builders and tradies working.”

REA Group research showed that increased property market activity largely came from outside New South Wales, which recorded a rise of 55 per cent in enquiries, with the $750,000 cut off being an unrealistic requirement given the state’s lofty property prices.

This was compared to a 132 per cent lift in Victoria and the surge in Queensland and South Australia, up 209 and 216 per cent respectively.

Western Australia was the standout, with enquiries rocketing 617 per cent, boosting a market that has been stagnant for years.

Ms Wawn said the jobs would eventually follow.

“We’ve not seen that impact yet but the positive effects of HomeBuilder in terms of building activity, approvals and jobs are only a few months away, and businesses are putting staff in place in readiness.

“In terms of new contracts and sales, builders around the country are telling us HomeBuilder is a game changer.”

In Ipswich, the fastest-growing region in Queensland developer Orchard Property Group unveiled its latest project in time for the federal grant.

The 502-lot, $105 million Aurora project in the heart of Ipswich’s booming southern corridor will launch with the 63 homesites in the first release of Aurora Deebing Heights to be completed and registered in September.

“The HomeBuilder grant, when combined with an additional $15,000 state government grant, has been a strong driver of demand for new land since it was announced in June and we would expect that to continue right up to the deadline at the end of December,” managing director Brent Hailey said.

The fine print

Eligible Homebuilder applicants must earn less than $125,000 a year as an individual, or less than $200,000 a year as a couple. If building a new home, the property value must not exceed $750,000; and if using the grant to renovate, the value of the works must be between $150,000 and $750,000, and the value of land must not exceed $1.5 million. Contracts must be signed by 31 December 2020.

First home owner grants by state

In addition to the federal HomeBuilder grant, additional one-off payments to encourage and assist first home buyers to buy or build a new residential property for use as their principal place of residence are available in each state.

ACT – $,7000

NSW – $10,000

NT – $10,000

Qld – $15,000

SA – $15,000

Tas – $20,000

Vic – $10,000

WA – $10,000


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