HomeBuilder puts tradies to work in smaller capital cities

1 May 2021

Builders in the smaller states are under the pump after being inundated with work stemming from the federal government’s pandemic HomeBuilder stimulus.

South Australian residents lodged the highest number of ­applications per capita for the $25,000 grant over the past 10 months, accounting for 7.19 applications for every 1000 people in the state, according to figures from the Housing Industry ­Association figures.

It was a trend observed in ­several of the smaller states and territories as state government treasury offices were flooded by a higher than expected number of applications, with Queensland (5.08), Western Australia (6.67), Tasmania (5.66) and Canberra (6.59) each outpacing the national average of 4.73 applicants per 1000 people.

Victoria also clocked 5.25 grants per 1000 residents.

HIA chief economist Tim Reardon said the numbers were an indicator of future work for builders and tradies.

“If you think builders in WA and the southeast corner of Queensland are under the pump, imagine what it’s like in Adelaide,” Mr Reardon said.

One of the biggest drivers in both South Australia and Western Australia was the rise in ­population due to pandemic ­relocations, which increased ­demand for housing at the same time locals also became interested.

“WA had underperformed the previous two years.” Mr Reardon said.

“They hadn’t built enough homes to meet the growth and population that they’d achieved, which is why we’d seen that market all primed to go.”

The only two regions to come in under the national average were the Northern Territory and NSW, reporting 2.84 and 1.53 ­applications per 1000 people ­respectively.

The HomeBuilder grant was one of the main reasons Keziah Solomon, 22, decided to build her way into the property market. With the help of $55,000 in both federal and state stimulus, she bought a plot of land at Forrestdale, south of Perth, soon after ­applications for the scheme opened last June.

“I’d just started working and looking at all my options,” Ms Solomon said.

“It seemed to be a real initiative to look into building.

“I feel like I skipped the whole renting stage.

“Having that cash to help own your own home quicker really helped,” she added, as she plans to move out of her parents’ home once construction is finished.

In Canberra, strong price rises over the past 18 months and limited land supply made renovation an attractive proposition, with the territory leading the county with 1.55 applications per 1000 people.

Cedar Woods managing director Nathan Blackburne said buyers were seizing this once-in-a-lifetime opportunity, causing the Perth-based developer to experience a huge surge in sales between last June and February this year in all its markets: Perth, Adelaide, Melbourne and southeast Queensland.

“Business and consumer confidence levels, particularly in WA, are high right now and there is considerable pent-up demand that should support positive conditions in the new housing sector for some time yet,” Mr Blackburne said.

“The surge has created pressures in the home-building industry with builders generally operating at capacity in WA.

“It’s fair to say that delays are being experienced, but builders are doing their best in unprecedented circumstances.”

Sydney and Melbourne are the two market of concern following the mass exodus from the larger cities and the disappearance of overseas migration, both of which impact heavily upon the local economy and housing demand, Mr Reardon said.

(Source: The Australian)