The government will this week unveil generous grants for new homebuyers, which will reportedly be on offer for everybody – not just first-timers.
The next phase of government stimulus designed to revive the economy in the wake of the coronavirus crisis will focus on housing construction, it’s been reported.
Treasurer Josh Frydenberg is preparing to unveil a mammoth new homebuyers scheme that will be available for all Australians – not just first-time buyers, as has traditionally been the case with such grants.
Sky News political editor Andrew Clennell revealed today the plan would be detailed this week, in a bid to prop up the economically crucial home-building sector.
“This will be across the board – not just for first homebuyers – as the government looks to prevent a 30 to 50 per cent drop in residential construction,” Clennell said on Sky News.
The government fears a collapse in residential construction activity will damage housing supply and put pressure on affordability in the mid- to long-term.
Construction is also a major pillar of the national economy, with economists warning it’s set to take a massive hit due to COVID-19.
There are few details about what the grant will look like – how much, any thresholds on home values and whether it’s targeted in specific locations.
But Clennell said a key feature of it would be to “save construction jobs”.
Labor has been calling for urgent government support for the housing sector for several weeks.
Speaking on Sky News this morning, Opposition treasury spokesman Jim Chalmers cautiously welcomed the news.
“Let’s see what they announce during the news,” Dr Chalmers said.
“Already, before the crisis, construction was relatively weak and homeownership was at 60-year lows, so we had a challenge there.
“That challenge has been exacerbated by this coronavirus crisis. In two or three months, we are very worried that construction will fall off a cliff and that’s why we have been making very constructive suggestions about what the government might do.
“We want to make sure that their plan is comprehensive, and we hope that they pick up and run with some of the ideas that (Labor has) put on the table.”
The Opposition wants to see support for tradespeople in the building industry and a focus on investment in social housing stock, he said.
He also called for a program to house essential workers closer to where they work.
“We said we’ve got an open mind on grants and as recently as yesterday we put an idea on the table to lift the cap on the loan deposit scheme to try and incentivise new builds as well,” Dr Chalmers added.
The government’s first home loan deposit scheme – a key election commitment from Prime Minister Scott Morrison – was fully subscribed in its first few months of existence this year.
It has been announced it will run again from July. The scheme effectively provided a guarantee on first-time buyer deposits, meaning they would need as little as 5 per cent of the purchase price to secure a mortgage.