On 26th of May 2020 Prime Minister Scott Morrison announced that the Federal Government is working on a multi-million dollar scheme to construct residential housing as part of its strategy to stimulate the economy and prop up the building industry as the nation emerges from the coronavirus crisis. There is a predicted decline in in residential construction of 30%, with no predicted upturn in sight. This would ultimately result in a significant reduction in jobs.
In order to curb this coming trend, the Federal Government are proposing a scheme, which is currently being developed by Treasurer Josh Frydenberg and Assistant Treasurer Michael Sukkar, which aims to curb the imminent decline in construction that is looming, as a result of the economic impacts of COVID-19. The scheme being proposed is an “economic stimulus package” which will take aim at the building and construction industry by providing a New Home Grant of $40,000.00* to Buyers who are constructing a new home.
The estimated impact of this grant could cushion Australia’s economic downturn by stimulating future jobs and thus leading to stabilisation of the housing market.
There are also calls from industry groups to increase the grant to $50,000.00, not the $40,000.00 mentioned. However, until the scheme is finalised, we will have to wait for the official outcome of the grant. In the meantime, we are hopeful that the package will be delivered quickly as it would make home ownership even more achievable for Australians and potentially ensure that there is a clearer path out of the current crisis.
We will endeavour to keep you updated as the package is announced. For more information please follow these links https://www.pm.gov.au/media/address-national-press-club-260520 or https://www.afr.com/politics/federal/plan-to-avoid-housing-valley-of-death-20200526-p54wk6.
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*Estimation only