The $688 million HomeBuilder program is not just about helping Aussies get their dream home, it's a much-needed lifeline to the country's builders and tradies and the economy as a whole.
The stimulus scheme offers grants of $25k to build a new home, substantially renovate an existing home or buy off-the-plan.
"There have been some criticisms of HomeBuilder in relation to the qualification criteria, saying it is too restrictive and has too many caveats," says Toby Balazs, CEO of realestateview.com.au.
"However, the scheme will still provide a significant stimulus to the construction industry, and importantly provides funds to buyers of new construction and off-the-plan properties, as well as existing homeowners choosing to renovate.
As the economy looks to rebound from the effects of the pandemic, HomeBuilder is another important scheme from the government designed to aid that recovery.Toby Balazs
"Covid-19 has undoubtedly impacted the property industry as a whole," says Toby. "But some of the development projects we've promoted on realestateview.com.au and the AD Group have seen high inquiry rates.
"There is still strong consumer demand for newly constructed properties."
The big winners from this cash bonanza will be first-timers buying brand new or off-the-plan homes.
And the reason is this.
The grant for first-time buyers is complementary to existing state and territory first homeowner grants, stamp duty concessions and the government's First Home Loan Deposit scheme, as well as the First Home Super Saver Scheme.
This means first home buyers can make big savings.
How much you save depends on where you live. For example, in NSW, WA and NT savings are up to $45k. Victorians can save up to between $45k and $55k.
The grant can also help those buying an off-the-plan home, and it's a great way for first home buyers to get their feet onto the property ladder.
Jordy Catalano is managing director of Apartments & Developments (a-d.com.au), a leading property platform where you can search for off-the-plan apartments, townhouses and land for sale. He explains more.
"In some cases, developers are offering as little as a 5 per cent deposit required until settlement, giving you time to save a deposit of 20 per cent, avoiding the requirements for Lenders Mortgage Insurance," says Jordy.
"The HomeBuilder incentive is really appealing when used in conjunction with the First Home Buyers Grant."
According to Jordy, it's not just investors that are attracted to off-the-plan properties, there has been a shift to more owner-occupiers getting in on the act.
"Along with considerable stamp duty savings, if you buy the right apartment it can lead to capital growth in between purchase and settlement," says Jordy.
Then there are lifestyle advantages to consider.
"In recent times, developers have adopted a more considered approach to liveability, building projects that are close to transport links, with amenities like swimming pools, gyms, communal spaces and car-sharing services, which can mean a reduction in your existing living costs," says Jordy.
"In some cases, this means there is not much difference in your outgoings between renting and owning.
"Design has also become a lot more important," says Jordy. "Apartments are now made to be lived in, rather than simply returning a rental yield
"Developers also are including more features to reduce carbon footprint and buyers have been actively seeking out greener options."
Apartments are now made to be lived in, rather than simply returning a rental yieldJordy Catalano, Apartments & Developments (a-d.com.au)
R.Iconic Melbourne is a great example of an apartment development being built today and is proving popular with first home buyers.
Here home seekers will find high-end style, a prime location and world-class leisure and lifestyle inclusions.
With one-bedroom apartments starting from $507k and two-bedroom apartments from $722k, it falls well within the criteria for the HomeBuilders grant.
First home buyers can purchase with a low deposit, for example, the deposit for a two-bedroom apartment will be $45k. Then they can access the HomeBuilder Grant worth $25k and the First Home Owners Grant worth $10k.
The developer will then match these government grants - so an additional $35k in savings on top. Plus there is a range of other incentives and offers available.
Colliers managing director of Residential Tim Storey said the various government incentives available right now had made apartment purchase more affordable than ever, with first home buyers having the biggest advantage.
"The COVID-19 pandemic has created a once-in-a-generation opportunity to enter the market in an outstanding location by presenting a range of incentives that remove the hurdle of the usual deposit - the greatest barrier for young buyers today," he says.
"We have many buyers who have been renting in and around the CBD now moving to purchase an apartment and pay less on their mortgage than they are currently paying on rent."
Are you eligible?
Not everyone can benefit from this cash bonanza. It's means-tested, the new home must cost less than $750k and you need to act fast.
So before you call the moving truck, check the following eligibility criteria:
- You are an Australian citizen aged 18 years or older and an individual, not a company or trust.
- You are on an income of less than $125k or $200k if you are a couple.
- You are spending between $150k and $750k on a renovation for a home that has been previously valued at less than $1.5 million; OR
- You are building a new home worth less than $750k.
- The property is not an investment property and this will be your principal place of residence.
- You are building or renovating with licensed builders.
You need to enter into a building contract before the end of this year and building must commence within three months of the contract date. Although, the HomeBuilder construction period has been extended in Victoria due to its ongoing lockdown measures.