Home builders nervous about $25,000 hit as government deadline looms - ABC News

Nervous home builders are urging the federal government to tweak rules around its HomeBuilder scheme and spare them a $25,000 hit to their finances.

Key points:

• Many HomeBuilder applicants fear they will miss out on the $25,000 grant they banked on, and are having to re-assess their situation
• They’re calling for changes to rules requiring work to begin on HomeBuilder projects within six months of contracts being signed
• Labor and construction industry groups both back the changes

Many who applied for the $25,000 HomeBuilder grant are fearful they will not be able to start work within the six-month construction deadline and will forfeit the grant.

The HomeBuilder scheme closed for applications on Wednesday, and under its rules, work has to commence on a project within six months of contracts being signed.

It offers owners grants worth tens of thousands of dollars to either build new homes or substantially renovate existing properties.

But many trying to make the most of the extremely popular scheme hit trouble actually getting started — with stretched builders struggling to find building materials and local governments snowed under with development applications.

It has some wondering how they will pay for a project they have committed to, and worried they will find themselves with a half-built home.

'There's so many elements of this that weren't thought out'

Brooke Dalwood, 23, and her partner Erik only started seriously thinking about building their first home when grants like HomeBuilder were first made available.

They wound up buying land in Kangarilla, SA, and she said they did their due diligence — seeking assurances from their builder that they would not miss the six-month window and get caught out.

"We actually had that sort of verbal guarantee from the builder," she said.

"That's why we signed, we were pretty sure that we were going to get this $25,000."

But while Ms Dalwood's builder was ready to go, her local council was not — she is still waiting for development approvals, and time is running out.

"Our deadline is May 24, and currently we are still waiting for building consent and development approval from the council," she said.

"We've been advised that it is unlikely we will meet that six-month deadline."

Ms Dalwood said it meant they would wind up moving into a half-built house and would have to finish jobs as they could save the money to pay for them, doing as much DIY as they could.

She said given the popularity of the scheme, and the problems that she thought should have been foreseen, there was a case for change for people in situations like hers.

"There's so many elements of this that weren't thought out," she said.

"And there's so much money there that could be put back into the building industry that won't be as described as an extended."

Distressed owners reassess their options

Melanie Velden wanted to move her growing family to the countryside, planning on building a new home near Clunes, Victoria.

While always planning on making the move, she said she and her husband used the opportunity presented by the HomeBuilder grant to do much more than originally planned.

Melanie Velden said she and her family had made financial decisions based on the assumption they would receive the grant.(

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"The extra $25,000 gave us the opportunity to build a bigger home than we were looking at," she said.

"So that was a great opportunity for us and our family — to have some more space."

But she said while the planning documents were lodged with the council last November, they were still waiting for development approvals to come through — and the deadline to begin building arrives next week.

"I have tried every avenue possible, we have been hounding council on a weekly basis, the company that's working for us is doing that as well," she said.

"And at this point, everybody's telling you, there's nothing we can do, we're completely stuck with what we've got."

Ms Velden said they made financial decisions based on the assumption they would receive the grant — conceding that may have been "hasty".

They are looking at how to cover the shortfall, figuring out what they can live without.

"There won't potentially be curtains in the home," she said.

"Landscaping and things like that all have to be put on hold, it'll be a long time saving to try and get those funds to get everything finished."

Ms Velden's block of land near Clunes in Victoria remains empty.(

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Labor, industry call for change

Both Labor and elements of the construction industry have been calling for change to the construction commencement date, suggesting it be stretched to 12 months.

Both agreed the policy had been a success — but this issue risked limiting that success, as less investment was directed into the sector.

Denita Wawn from Master Builders Australia said the change made sense.

"The scheme has worked in leveraging significant investment into residential construction — this change would only further that," she said.

Labor's housing spokesman, Jason Clare, said it was a simple tweak to the rules that could save a lot of pain.

"There's no reason not to do this, it won't cost the government a cent more," he said.

"And if anything, it will help make life a bit easier for the housing construction industry, which is busy building houses at the moment, but expect there to be less houses to build next year."

Applications for the HomeBuilder scheme closed on Wednesday but supporting documentation is not due until April 2023.

Housing Minister Michael Sukkar previously said the timelines were adequate, but government were constantly consulting with industry.

He said the pipeline of residential construction work created by HomeBuilder would continue to support the industry over the next two years.

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2021-04-14 14:27:03Z
CAIiEGk3VUkI-avYUGA_LCBC_4UqFggEKg4IACoGCAow3vI9MPeaCDDciw4

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