Home / Newsroom / Homebuilder can sustain jobs and investment through the road to recovery

Homebuilder can sustain jobs and investment through the road to recovery

A new submission released this week recommends an extension and re-design of the Commonwealth Government’s HomeBuilder initiative to sustain local construction activity and jobs to offset the loss of economic activity within the property industry due to lower levels of immigration and population as a result of COVID-19.

The Urban Development Institute of Australia (UDIA) – the nation’s peak body representing the property development industry – said research showed the loss of immigration and population growth risks stripping $17.9 billion in direct gross value added from the national economy over the next five years.

However, the submission – which draws on research from Urbis – also shows that domestic demand for new housing remains substantial and can play a crucial role in lifting economic activity over the short to medium term until immigration returns to more sustainable levels.

“The property industry can and must play a central role in powering the nation’s economic revival – generating jobs, wages and activity up and down supply chains,” said UDIA National President Simon Basheer.

“The stimulus benefits of extending HomeBuilder are consistent with the Government’s argument that we need to boost spending now to create a robust economy and sustainable pipeline of jobs.

“Housing and construction contribute 750,000 direct and indirect jobs to the nation, so it is well placed to fill the gap caused by border restrictions and slower population growth due to current immigration levels.

“The UDIA and the property industry applaud the Federal Government for HomeBuilder which we know is already working to boost confidence and trigger new dwelling commencements and stimulate employment.

“However, with the prospect of an elongated economic downturn and lower international migration, an extension of the scheme – matched with smart design solutions to maximise its breadth, reach and application – will bolster Australia’s prospects for recovery.

The current activity in the industry is welcomed but lead indicators suggest that there is a real risk of a second cliff occurring in 2021 when the current stimulus of Homebuilder ends.

“With an extension of HomeBuilder and implementing some design amendments to enable a broader range of dwellings typologies to be captured, further activity and economic benefit for the nation can be generated” Mr Basheer said.,

UDIA partnered with Urbis to quantify the effects of a sustained downturn in immigration and population growth, which usually fuel much of the nation’s economic prosperity and demand for new housing construction. The study found:

The research did however also find that the residual domestic demand is substantial and could play a crucial role in lifting Australia’s economy especially over the short to medium term. UDIA is now recommending a second tranche of funding to support HomeBuilder as well as design solutions to the Scheme to maximise the benefit.

These recommendations include:

– Detached housing to have a new commencement timeframe of December 31, 2021, and
– Semi-detached and attached housing (ie: townhouse and apartments projects) to have a new commencement timeframe of December 31, 2022

Redefining the definition of “commencement” to allow for flexibility which accounts for differences in staging, timing and triggers for detached, semi-detached and attached housing products;

Download a copy of the submission HomeBuilder Mark 2: UDIA Plan for an Extended Home Builder Scheme

Media enquiries.