Building approval numbers have plummeted even though the federal government is giving out $25,000 subsidies to home owners who want a new house.
Treasurer Josh Frydenberg’s HomeBuilder program is, until December 31, providing owner-occupiers, and not just first-home buyers, $25,000 grants to build a new home or renovate an existing one.
The $688million program was announced in June but despite that, building approvals in New South Wales, Australia’s most populated state, plunged by 14.2 per cent in August.
This however followed a 32 per cent increase in July as coronavirus lockdown delays caused a short-lived spike in approvals.
National building approvals last month fell by 1.6 per cent, unpleasantly surprising financial markets which had expected a flat result.
National building approvals fell by 1.6 per cent, unpleasantly surprising financial markets which had expected a flat result. This occurred despite home owners receiving $25,000 subsidies from the federal government’s $688million HomeBuilder scheme
Labor’s housing spokesman Jason Clare said the sharp fall in building approvals highlighted the failure of the HomeBuilder scheme.
Australian building approvals
New South Wales: down 14.2 per cent
Victoria: up 1.8 per cent
Queensland: up 8.1 per cent
South Australia: down 4.8 per cent
Western Australia: up 33.8 per cent
Tasmania: down 26.2 per cent
Northern Territory: up 22.6 per cent
Australian Capital Territory: down 32 per cent
Source: Australian Bureau of Statistics building approvals for August 2020
‘Despite the government telling us how successful HomeBuilder is, almost four months after its launch, this data shows it’s just not true,’ he said.
‘There will be less work for tradies and jobs will be lost unless the government tries to fix its bungled HomeBuilder Scheme in next week’s budget.’
Westpac senior economist Matthew Hassan said ‘volatility in NSW’ caused the national drop in council building approvals in August.
‘The July result represented a catch-up, as approvals delayed by the initial nation wide lock-down were eventually processed by city councils,’ he said.
‘This raised the risk of an unwinding leading into August results.’
Not all states struggled with building projects approved by local councils surging by 33.8 per cent in Western Australia and by 8.1 per cent in Queensland.
Even Victoria enjoyed an 1.8 per cent increase despite Melbourne’s five million residents being placed into a strict, Stage Four lockdown with an 8pm to 5am curfew.
Nationally, apartment approvals dived by 11 per cent last month, partially offsetting a 23 per cent rise in July.
House approvals fell 4.8 per cent in August, even though Australians earning up to $125,000 a year and couples on combined incomes of $200,000 are eligible for $25,000 grants.
The HomeBuilder subsidy is available for new houses with a market value of up to $750,000 while the renovation grant is there for homes with a market value of up to $1.5million.
Labor’s housing spokesman Jason Clare said the sharp fall in building approvals highlighted the failure of the HomeBuilder scheme. Pictured is a house under construction in Melbourne