WAIT IS ON FOR HOMEBUILDER

Finance extensions surge as buyers wait for grant framework to catch up

FOLLOWING the unprecedented surge in land sales last month, many agents have now seen a corresponding surge in finance extension requests, as those buyers that jumped to purchase with the support of the Queensland Government’s HomeBuilder grant now have to wait for the practicalities to be dealt with before they can get their final tick of approval.

Since the announcement in early June, there’s been a wave of buyers making the move in good faith, understanding that they would fit the criteria set out for eligibility – income cap, property value cap, time frames and so on, keen to secure land quickly lest they miss out (a very real possibility as land supplies tighten).

However, like a number of government stimulus packages launched since the onset of COVID-19, the headlines came out well in advance of the nuts and bolts of implementation and when tens of thousands of dollars are involved (times tens of thousands of applicants) the implementation is understandably, pretty important.

While the funds are being provided by the Federal Government, they’re being distributed via the respective State Governments, which needed to first sign up to be on board.

Queensland has only just done so. And although there has been reasonably clear guidance on who is eligible to access the grant, there’s still no confirmation on when they can access it – that is, when it will be paid.

The expectation is that the grant will be paid in a similar way to the current First Home Buyer’s Grant, being at slab stage for a new build.

If that’s the case, buyers can use HomeBuilder as their contribution, reducing the amount of deposit they would need to save and allowing more people to get into the market sooner and stimulating the economy.

Until that expectation becomes reality, however, banks are unable to make the call on funding and subsequently, buyers are having to request extensions.

For many, this extension should be reasonably granted but for some buyers, this delay will mean missing out on their address of choice, and depending on availability moving forward, could see them either paying more for another block, accepting a lesser position or missing out altogether.

HomeBuilder is offering a lifeline to builders and trades and a big step up for those getting into the market, all of which are great things. It just feels like there may have been an opportunity to have it work that little bit better.