HomeBuilder grant triggers real estate and land enquiry frenzy

The new home stimulus package has inspired a huge response but property experts question its effectiveness as virus cases soar.

The government’s new homebuyer grant has triggered a land rush with demand for vacant residential property surging in the last two months.

Emails to real estate agents enquiring about land sales soared by nearly 60 per cent in June after the HomeBuilder scheme was announced, according to figures from realestate.com.au.

The $25,000 handout for those building a new home for less than $750,000 was intended to incentivise first time buyers and this group has responded in droves.

Enquiries from new buyers looking for vacant land was up nearly 180 per cent, compared to homeowners rising by 35 per cent and investors just 26 per cent.

“It’s obviously going to be very positive for the construction sector,” REA Group director of economic research Cameron Kusher said of the industry that has suffered mass job losses since coronavirus rattled the Australian economy.

“The main thing though is that HomeBuilder is a stimulus package much more designed for house and land than it is for apartment builders, who certainly seem to be missing out.”

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National enquiries for land sales soared in June.

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The recent surge in coronavirus cases in Australia has created instability over the length of the scheme which was created for building and renovation contracts signed between June and December 31 this year, Mr Kusher told news.com.au.

“If places like Victoria, for example, can’t get COVID infections under control and depending on what else happens around the world, once you get to the end of this year all the first home buyer demand has probably been pulled forward,” he said.

“Anyone who was thinking of building a home has probably done that because there was $25,000 up for grabs. So where’s the next source of demand going to come from in 2021 for the housing market if you’re exhausting so much of it this year?”

Without the extension of the HomeBuilder grant or creation of a new stimulus package, Mr Kusher said there will be a “big hole in demand”.

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The HomeBuilder grant is expected to be a boost for the residential construction market. Picture: Patrick T. Fallon/Bloomberg

Increased property market activity largely came from outside New South Wales, which recorded a rise of 55 per cent, 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.

But the real boon was reserved for Western Australia where enquiries rocketed 617 per cent higher, providing a healthy boost for the market which has suffered heavy falls in recent years.

Mr Kusher said this figure is supported by a near 140 per cent rise in sales in that state over the last six weeks.

“That state has been struggling for so long and has had a lot of development hit the market when prices started to weaken, so it’s not surprising that people are taking advantage of HomeBuilder,” he said.

“Plus prices have been sliding there for about six years now and interest rates are the lowest they’ve ever been.”