CHAMPAGNE corks are popping among prospective home builders and the building industry, with Premier Mark McGowan announcing the construction deadline for the Building Bonus stimulus would be extended by six months.
The $20,000 payment is available to any homebuyer who signs a contract by December 31 this year to build a new house or purchase a new property in a single-tier development (such as a townhouse) prior to completion of construction.
Under the existing arrangements, site excavation works to build a new home must start within six months of contracts being signed in order to be eligible for the grant.
Demand for the grant has been high and industry bodies and homebuyers have expressed concern that six months was not enough time to begin construction.
Homebuyers will now have a period of one year from the time their contract is signed to commence construction.
Treasure Ben Wyatt said the Building Bonus had been so successful and created so much activity in the building industry that six months was simply not long enough for many people to start building their new home.
“We’ve closely monitored the progress of the program and this adjustment will give many potential homebuilders additional time to ensure they can access the grant,” he said.
Mr McGowan said the extension applied immediately and would give more West Australians the chance to access a $20,000 grant to build their own home and created hundreds more jobs in WA.
“Reports from the building industry confirm the grants have been a crucial driver of jobs and activity, and the industry is now thriving as a result,” he said.
“This extension of the construction period will allow that work to continue, creating a pipeline of construction work that will continue all the way through to 2022, providing certainty to the whole industry.
“The program has been an overwhelming success, with many Western Australians taking the opportunity to access the $20,000 grant to assist them to build their own home.”
- Additional funding for Building Bonus
While the extension has been applauded by major industry bodies, New Home Building Brokers managing director Tristan Kirkham expressed some concerns, particularly for the western suburbs infill market.
He said the change was great for the first-home buyer market and estates where builders had some time concerns on titles getting released and working drawings prepared, but in areas where home builders needed more detailed plans drawn up and approved there were significant time lags that could lead them to miss this year’s December 31 deadline to sign a contract.
“It can take up to eight weeks to get a design and full costing, then you need to lodge a development approval with the council and they’re taking anywhere from 60 to 90 days minimum and if massive changes are required due to the interpretation of the R-codes, you may need to advertise, need dispute resolution and go through SAT and after that, finally sign a contract with a builder with full working drawings and engineering,” he said.
“I have a client where the plans were lodged at council on July 21 for a single-storey home with an undercroft, and are now waiting on the next council meeting in November; if it needs to go to SAT that won’t happen until next year.”
The other issue facing all new homebuilders was prospective price increases.
“It’s all well and good to extend the construction period, but if you sign a contract with a builder on November 1, 2020, and you put your slab down on November 1, 2021, do you think that builder is going to hold their price for that 12 months — highly unlikely,” Mr Kirkham said.
“Is the price increase from the builder going to be as much as the grant itself? I think it will be for some people.”
Mr Kirkham said the positive in giving people more time to build was it would make the cash flow for industry more consistent, which was what builders needed, rather than a massive bubble.