Construction industry calls for HomeBuilder extension to prevent 'calamitous' economic slump

Master Builders Australia wants the federal government to extend the HomeBuilders stimulus program for a year, at an estimated cost of $1.3 billion.

The Federal Government has been giving eligible Australians $25,000 to build or substantially renovate their homes Source: AAP

The building and construction industry is calling on the federal government to extend its HomeBuilder grants program for another year to help the sector through the impact of the coronavirus.

Master Builders Australia claims the scheme announced in June has been "the most effective government stimulus measure in a decade".

The $688 million program provides grants of up to $25,000 to help people build or renovate homes.

The grants are only open to single applicants earning no more than $125,000 per year or $200,000 for couples.

The government expected it to drive 20,000 new builds and 7000 renovations.

But a Senate committee inquiry examining the government's coronavirus stimulus measures heard last week only 247 applications for the program, including 157 from South Australia and 90 from Tasmania, had been received so far.

Master Builders wants the government to extend the program for 12 months when it releases its delayed 2020/21 budget in October, at an estimated cost of $1.3 billion.

MBA CEO Denita Wawn says the industry needs more stimulus and has forecast a 27 per cent fall in homebuilding activity in 2020/21, compared to 2019/20, due to the economic impact of the coronavirus.

Chief Executive of Master Builders Australia Denita Wawn. Source: AAP

"This will be calamitous for many of the nearly 370,000 home building businesses that are vital to local economies and communities throughout Australia unless the government steps in with extension of HomeBuilder and other stimulus measures," Ms Wawn said in a statement on Monday.

"Our modelling shows...a one-year extension...will require an investment of $1.3 billion, return a boost to GDP of up to $4.5 billion, create more than 4,500 additional new jobs and result in the construction of more than 6,000 new homes."

Homebuilder eligibility requirements:

* Recipients must be owner-occupiers

* Single applicants must earn no more than $125,000 per year or $200,000 combined income for couples

* Contracts must be signed by December 31

* Construction must commence within three months of the contract date

* For renovations, the existing property value must be no more than $1.5 million, and the renovation must be worth between $150,000 and $750,000

* For new builds, the house and land value must not exceed $750,000