The scheme was initially due to end in January but was extended with a decreased grant from $25,000 to $15,000, while the timeframe for construction to be started was extended from three months to six months.
However, even with this extended timeline there are fears applicants could miss out due to a shortage of tradespeople and available materials.
Looking to compare low-rate home loans for your new build? Below are a handful of low-rate construction loans in the market.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.43% p.a. | 6.68% p.a. | $2,679 | Interest-only | Variable | $0 | $530 | 80% |
| Promoted | Disclosure | ||||||||||
6.44% p.a. | 6.79% p.a. | $3,141 | Principal & Interest | Variable | $395 | $null | 95% | |||||||||||||
6.64% p.a. | 7.03% p.a. | $2,767 | Interest-only | Variable | $null | $720 | 90% | |||||||||||||
6.64% p.a. | 7.10% p.a. | $2,767 | Interest-only | Variable | $0 | $530 | 80% | |||||||||||||
6.78% p.a. | 6.82% p.a. | $2,825 | Interest-only | Variable | $0 | $450 | 80% | |||||||||||||
7.05% p.a. | 6.24% p.a. | $3,343 | Principal & Interest | Variable | $0 | $1,212 | 70% | |||||||||||||
7.24% p.a. | 8.01% p.a. | $3,017 | Interest-only | Variable | $20 | $644 | 90% | |||||||||||||
8.39% p.a. | 8.72% p.a. | $3,806 | Principal & Interest | Variable | $0 | $0 | 75% | |||||||||||||
8.45% p.a. | 7.71% p.a. | $3,521 | Interest-only | Variable | $0 | $1,212 | 90% | |||||||||||||
8.68% p.a. | 8.75% p.a. | $3,909 | Principal & Interest | Variable | $0 | $900 | 80% |
According to Master Builders, the timeframe to get timber in Western Australia prior to HomeBuilder was a week, but this had ballooned out to six weeks since the scheme began.
Commissioner of State Revenue WA Nicki Godecke said while only two HomeBuilder applicants had been rejected due to not meeting the timeline, this may change as the scheme came to a close.
"It is likely more applications lodged towards the end of 2020 will now be approaching the cut-off for construction to commence and will not meet the six-month commencement date requirement," Ms Godecke told the ABC.
Federal Member for O'Connor Rick Wilson said the federal government would be flexible on a discretionary basis if required.
"I don't think there's any appetite within the government or treasury to say, 'You're one day over the six months so we're not going to allow you to receive the subsidy'," Mr Wilson said.
"I'm sure there will be a bit of leeway to allow people to press ahead and get their projects underway."
Related: How to finance your HomeBuilder construction.
Mark Bernberg, sales director at Sydney-based property developer ALAND, said half of their 700 projects since June had been via people taking advantage of HomeBuilder, and was expecting March to be one of their busiest months since the scheme started.
“Last weekend was extremely busy with over 65 sales made on new properties,” Mr Bernberg said.
“We expect a similar result this weekend, as first home buyers rush to get into the market before the scheme ends.”
In addition to the HomeBuilder grant, first home buyers in Sydney can take advantage of the $10,000 first home owners grant plus stamp duty concessions worth almost $30,000 on a build worth less than $750,000.
HomeBuilder frenzy to be seen in March
According to the Housing Industry Association (HIA), the number of construction loans to owner-occupiers rose by 60.5% in the three months to February.
HIA economist Angela Lillicrap said she expected a surge in sales in March as HomeBuilder ended, but this wouldn't be as great as the near record volume of new home sales seen in December.
“The full impact of the extension of the HomeBuilder grant, at a value of $15,000, will not be observed until the end of March," Ms Lillicrap said.
“To receive the HomeBuilder grant, construction is required to commence within six months of signing a contract to build.
"As a consequence, it is possible that builders will delay the signing of some contracts to allow for greater flexibility and more detailed planning of projects."
Those looking to try and take advantage of the HomeBuilder scheme before its March 31 deadline are advised to consult their relevant State government website.
Photo by Brett Jordan on Unsplash
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