Developers welcome extension of first-home deposit scheme

Property developers have welcomed an extension of the First Home Loan Deposit Scheme and called for an expansion of stimulus measures.

The government will release an additional 10,000 places under the deposit scheme, earmarked solely for newly constructed dwellings.

Property developers have welcomed an extension of the federal government’s First Home Loan Deposit Scheme and called for an expansion of stimulus measures to the hard-hit apartment sector.

The Morrison government on the weekend unveiled the package to stimulate weaker areas of the housing sector, as major developers scramble to keep pace with demand for suburban housing est­ates in areas out of lockdown.

The government will release an additional 10,000 places under the deposit scheme, earmarked solely for newly constructed dwellings, with new rules and increased price caps aimed at boosting apartment sales as well as detached housing.

The high-rise sector is seeking further relief as it faces falling demand due to the closure of offshore markets and declining immigration. Apartment construction has been hit especially hard by the pandemic and unit approvals fell 11 per cent in August and 18 per cent for the year.

Property Council of Australia chief executuve Ken Morrison.

The Property Council of Australia called for similar change to the HomeBuilder scheme to accommodate off-the-plan apartment purchasers.

“It is very pleasing that the government has solved this challenge for off-the-plan apartment purchases and we encourage them to apply this solution to the highly successful HomeBuilder scheme,” Property Council of Australia chief executive Ken Morrison said.

Frasers Property Australia chief executive Anthony Boyd said stimulus measures had been excellent and should be continued given “mixed” market conditions.

Developers focused on detached housing and land subdivision in affordable growth corridors, with high local employment and consumer confidence, had been “reasonably strong” since June, he said.

Mr Boyd said earlier measures geared towards detached housing had incentivised developers to start construction and new rules now applied to apartments and medium density housing.

Developers selling apartments off the plan in Melbourne and Sydney had been forced to delay or defer projects. “We’re not through this yet, and with the offshore demand decreasing we really have to continue to stimulate domestic demand,” Mr Boyd said. “Any extension or any enhancement needs to broadly include different types of housing.”

Stockland chief executive communities, Andrew Whitson welcomed the scheme’s extension, which he said would provide welcome stimulus and confidence to the new housing sector, “particularly in NSW where the increased price cap will be most beneficial”.

“Australia’s residential property sector generates over $100bn annually for our economy and creating new homes and apartments is one of the most important job multipliers in the country, with the Australian Bureau of Statistics establishing that every dollar spent on residential construction generates a $3 impact in the broader economy,” Mr Whitson said.

Mirvac head of residential Stuart Penklis said the incentive encouraged first-home buyers into the market and praised the government for focusing on new builds.

“This scheme will provide more confidence for first-time buyers and complements the existing first homeowners grants,” he said.

Housing Industry Association managing director Graham Wolfe said it would support jobs in the residential building industry.

“Saving for a deposit can take 10 years or more. The … scheme will save first-home buyers tens of thousands of dollars and help them purchase their own home up to five years earlier,” he said.