Queensland government to extend building boost until April

The Queensland government has listened to the pleas of the property industry and will extend the $10,000 Queensland building boost for a further three months.

Deputy premier and treasurer Andrew Fraser says the boost is beginning to make headway in the housing industry.

Figures put out by the Queensland government show a jump in applications received over the past three months, with application numbers now over 3,700 since the stimulus scheme kicked off on August 1 last year.

Date

Applications received

August 26,2011

100

September 30,2011

569

October 28,2011

1,174

November 25,2011

2,038

December 30,2011

3,221

January 11, 2012

3,728

The $10,000 grant is available to all home purchasers buying or building a new home worth less than $600,000.

A lobbying group made up of the Housing Industry Association, the Property Council of Australia, Master Builders Australia and the Urban Development Institute of Australia has been calling on the Queensland government to extend the boost, as has property developer Stockland.

Speaking to Property Observer, Kathy McDermott, executive director of the Queensland division of the Property Council of Australia, says while the state’s housing sector has shown some signs of improvement in lending approvals in October and November, it is “still in critical condition”. 

“The market is still very distressed and needs support,” she says. 

McDermott says the boost has taken time to gain momentum but the reduction in interest rates in November and December has helped. 

She points to the recent PCA/ANZ property industry sentiment survey, which showed that there has been a “nice improvement” in confidence in Queensland, with the state’s confidence index rising above the national average in December – it was below the national average in September. 

The extension has also been welcomed by HIA Queensland executive director Warwick Temby who says it will "help the home building industry to gather some momentum and build on the early signs of recovery late last year".

"The Boost had played a part in rekindling interest in building a home.  Combined with the lift in affordability from lower interest rates and fierce competition among builders, the Boost has made it a great time for building a new home," says Temby.

“This timely announcement will help to set the scene for a much needed lift in activity from the thirty year lows the industry experienced in 2011.

“HIA had been concerned that the Christmas and New Year break was making it difficult for builders to finalise contracts to meet the previous end January deadline.  The three month extension has removed this problem for the industry.

Treasurer Andrew Fraser acknowledges that industry representatives had come to him asking for an extension to the boost, “and that's what we'll provide”.

"They've said to me, and the recent application numbers show, that the boost is increasingly gaining traction with potential buyers.

"Official interest rates have been lowered in recent months, and with the possibility of even more cuts, this $10,000 grant for buying or building a new home means it's never been more attractive to sign on the dotted line and support the state's housing industry.

"A first-home owner also gets the $7,000 state-funded first-home owner's grant and zero stamp duty if the home is worth less than $500,000.

"An end date of April 30 will give developers and builders and extra three months to market the boost and give the housing industry the kick-start it needs."

Fraser says the initial budget allocation of $140 million will cater for the time extension.

"So far we've seen over 3,700 applications for the building boost. There is obviously room within the budget allocation to accommodate the uptake in interest we expect over the next three months.

"Every housing stimulus package always has a large increase in interest at the back end of the time period, with many applications coming in after the end date."

"The HIA Home Sales report shows that Queensland is the only state that has increased the number of new home sales each month from August to November (the most recent month data has been collated for).

"I expect that momentum to swing through December and January and into the next few months as well.

"Building approvals data this week also showed growth for houses.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?