Home-owners have become the key drivers of the nation’s economic recovery, with a spike in take-up of the Federal Government’s HomeBuilder grants, which are estimated to underwrite $50 billion in broader economic activity in 2021.
A pre-Christmas rush to take up the $25,000 cash grants, which the industry claims have revived the residential construction sector, has led to a 91% surge in new home sales in December.
Treasury data reveals a tripling in the number of HomeBuilder grant applications to the end of December, taking the expected number of new builds from 27,000 to beyond 75,000.
The surge in applications for new dwellings or major renovations will see the cost to the Federal Budget of the scheme balloon from its original $688 million to around $2 billion.
Modelling of the data shows the added activity will support $18 billion worth of new construction in 2021 and deliver an unexpectedly-large boost to growth in the broader economy.
Economists have estimated that the commitments of home builders will drive $50 billion in broader economic growth, with a three times multiplier effect on investment.
The Government has announced that the scheme will be extended to March 31 at a reduced grant of $15,000.
