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The HomeBuilder scheme continues to encourage Australians to snap up vacant land, according to the latest study from Housing Industry Association and CoreLogic.
The study found that since the announcement of the HomeBuilder scheme in June last year, residential land sales have been rising consistently – including by a mammoth 42.7% in the last quarter of 2020.
During the same period, detached building approvals and loans for the construction of a new home reached record levels.
"Land prices can lag behind changes in demand due to the length of settlement periods," said Angela Lillicrap, economist at HIA. “Due to the timeframe between purchasing land and commencing construction, we expect the majority of land sales in the March quarter 2021 are unlikely to be directly related to HomeBuilder."
The construction delays prompted the Federal Government to extend the construction commencement requirement of the HomeBuilder scheme.
Existing HomeBuilder applicants will now have 18 months to commence the construction of their home. Those who signed contracts during the HomeBuilder eligibility period between 4 June 2020 and 31 March 2021 will be eligible.
"Extending the construction commencement requirement will smooth out the HomeBuilder construction pipeline, support jobs in the construction sector, and ensure that existing applicants facing difficulties in starting construction on their new builds and renovations are not denied a HomeBuilder grant due to circumstances outside their control," said Treasurer Josh Frydenberg.
Tim Lawless, Head of Residential Research at CoreLogic, said the surge in the take-up for residential sales and the HomeBuilder scheme has created a substantial pipeline of residential construction activity that will take some time to work its way through to completions.
"With land sales and detached housing approvals surging through the second half of last year, it makes sense for the government to announce a twelve-month extension to the timeframes associated with starting construction," he said.
