Media Archive / Developers Update – 2 July 2020 – Homebuilder Update

Developers Update – 2 July 2020 – Homebuilder Update

UDIA National Member Alert: Update on Federal Homebuilder Stimulus for New Housing

UDIA National has been working since the 4 June announcement of the Commonwealth Government’s “HomeBuilder” package to clarify and maximise the benefits of the scheme’s application.

This has included ongoing dialogue with the Government where UDIA has captured and presented feedback directly from members and the wider industry on a host of critical issues.

The subsequent guidance note issued on 18 June (available at https://treasury.gov.au/coronavirus/homebuilder) includes a number of clarifications and also included reference to sales contracts.

UDIA has been able to confirm that HomeBuilder is indeed intended to apply to sales contracts between buyers and developers (as opposed to its initial construct of contracts between a buyer and registered builder for a dwelling), as is commonly the case for off-the-plan apartment and townhouse projects.

Recognition of the different contractual arrangements used commonly across the industry as part of HomeBuilder was a key advocacy priority for UDIA. We are pleased the Government has considered our feedback and we have asked that it be made more explicit in further guidance material updates.

The Commonwealth has also released a copy of the National Partnership Agreement with the states. NSW, Victoria, South Australia, Tasmania, the Northern Territory and Western Australia are signatories to the agreement, with Queensland and the ACT expected to follow in coming days.

A copy of the Agreement is available here: https://www.federalfinancialrelations.gov.au/content/npa/housing/national-partnership/HomeBuilder_NP.pdf

The Agreement makes clear that the timing of the payments will align with the rules in each state for their release of First Home Buyer Grant schemes or at the discretion of the state where no Grant scheme is in place.

In the meantime, UDIA is continuing to engage with the Government on a host of other issues and member questions which require resolution, including:

  • More information about the discretion the States will have to waive the three-month construction commencement window where planning and other delays that are beyond the control of the buyer, builder or developer occur;
  • Extending the three-month construction commencement timeframe to recognise that the range of housing products in the market – from house-and-land to multi-unit apartments –that the current timeframe is not appropriate in for all segments;
  • Providing clarification on the definition of ‘commencement of construction’ to recognise the differences between infill, multi-dwelling and greenfield projects
  • Potentially extending the definition of “construction commencement” to include civil subdivision works, where also coupled with a home building contract which commences shortly after titles;
  • Clarifying the rules around unsold spec housing – recognising the risk relating to projects that have already been commenced;
  • Confirmation of rules around land lease-style developments, and the need for certificate of titles.

Numerous other technical issues have also been raised as part of our ongoing dialogue and advocacy which UDIA will continue to discuss with the Commonwealth.

UDIA is keen to see the resolution of the above items and the updated guidance material we understand the Government will  soon issue to ensure industry and homebuyers can unlock the full potential of the package and move forward with certainty and confidence.

We will continue to inform you on the progress of discussions with the Federal government as UDIA addresses these key issues on behalf of our members.

Members can also register for fresh guidance material from the Commonwealth via https://treasury.gov.au/coronavirus/homebuilder

Simon Basheer
UDIA National President