Potential homebuyers wanting to access the Federal Government’s HomeBuilder package are anxiously waiting on the ACT Government to sign up to the National Partnership Agreement to administer the stimulus scheme and release the funds before the scheme closes.
The property sector has welcomed the surge in interest since Prime Minister Scott Morrison announced the scheme offering $25,000 to build and buy a first home, or renovate an existing property, but fear buyers, owner-occupiers and builders will run out of time to benefit from it.
The scheme is available for eligible participants on contracts signed before 31 December 2020, but construction must commence within three months of the contract date.
Mortgage broker Mark Edlund, managing director of Clarity Home Loans, says that in the past week HomeBuilder had generated about 70 enquiries from people wanting to buy or renovate, but the firm had not been able to use it in any loan application yet or help anyone into a property due to a lack of detail.
It had triggered a lot of interest, but there was a lot of complexity from a financing point of view and the terminology was ambiguous, he said.
”Can we bank on that $25,000 at settlement of a unit? If it is a construction, does that $25,000 get factored in in the first drawdown of the progress payment to the builder or at the end? So do we have to fund the construction not using it?” Mr Edlund said.
He said the very narrow window of eligibility, which Chief Minister Andrew Barr had criticised, would make it difficult for many people to take up the scheme.
”You’ve got go find a block, get a builder, get some plans and get construction started in that three-month window. It’s a pretty tall ask,” he said.
”So I think there are going to be a lot of people, not through their own fault, who won’t actually qualify for it.”
He said likely hold-ups with development applications at the planning authority could also complicate matters.
”What happens to the finance and the fact that we’ve relied on that $25,000? What happens to it?” Mr Edlund said. ”It’s a bit of a gamble, a lot of uncertainty.”
Mr Edlund the banks were still not engaged and had not yet factored the grants into their loan-making processes.
They had little lead time and the likelihood of everyone getting their ducks lined up was limited, he said.
They might ask if it’s worthwhile for such a small segment of the market.
”The longer we wait the fewer eligible developments and eligible constructions there’ll be, let alone people wanting to do renovations if they don’t have their plans ready to go now and a builder lined up,” Mr Edlund said.
Master Builders ACT CEO Michael Hopkins said HomeBuilder had resulted in an immediate boost in inquiries in the ACT, with homebuyers rushing to new development sales offices over the past two weekends.
”MBA members have a range of questions about the operation of the program which we expect will be answered by governments over the coming days,” he said.
”It is important that the Federal and Territory Government work together to ensure the benefits of the grants can flow to homeowners and industry as quickly as possible so that jobs are preserved in the local construction industry.”
An ACT Government spokesperson said talks with the Commonwealth were at an advanced stage and ACT Treasury had received a final draft National Partnership Agreement.
”The Commonwealth announced the scheme prior to sending through any details to the States and Territories. ACT Treasury is currently working through the finer details of the scheme and its administrative arrangements,” the spokesperson said.
”Specific issues that have been discussed include initial eligibility checking, timing of payments and post-construction compliance. Other issues include administrative costs in managing the scheme, having clear definitions of renovation and new build and dispute resolution arrangements.”