HomeBuilder Grant Details & The Latest In Clearance Rates - June 2020 🏡🔨📈
June has been a massive month in the world of property and finance.
With many uncertain about where the property market is actually heading, the Australian government has stepped in to try and boost the residential construction sector, and we’ve broken down this HomeBuilder Grant below for you. See who qualifies and who doesn't for this scheme.
Also in this month’s blog, we delve into Australian clearance rates and which states are ahead of the curve with auction results.
Enjoy!
Brick by brick, how the HomeBuilder Grant can help you!
The Australian government introduced the Homebuilder Grant this month on June 4 in an effort to help stimulate the property market and drive economic activity across the residential construction sector.
This HomeBuilder Grant sees select owner-occupiers granted $25,000, but only if you meet the criteria first! Eligibility is determined by a number of factors including;
Building contracts being signed after 4/6/2020 and before 31/12/20. This contract must be with a licensed or registered builder, and specifically, you cannot be an owner-builder. Also, you cannot use a contract from earlier in the year even if construction hasn’t started yet, it must be signed for during this period.
Must be for owner-occupied purposes and not for investment. So it must be for your home, not your investment property.
Applicants must be 18 years of age or older and be an Australian Citizen. Unlike the First Home Owners Grant which is available to Permanent residents and New Zealand Citizens, the HomeBuilder Grant will only be available to you if you are an Australian Citizen. Not available to Permanent residents, New Zealand citizens or Indefinite or other types of visa holders.
Income tested: Single applicants must not earn more than $125,000 taxable income per annum. Joint income for couples must not exceed $200,000 taxable income per annum. Your taxable income is the income you have to pay tax on. It is the term used for the amount of income left after you have deducted all the expenses in your tax return that you are allowed to claim from your assessable income. Easily confused are these two terms, assessable income, and taxable income.
You can determine what your taxable income is by downloading your Notice of Assessment from MyGov, which shows your taxable income for the financial year. From 1 July, if you lodge your tax return quickly, then your taxable income for the new financial year can be used.When renovating an existing property, the renovations must be valued between $150,000 - $750,000 and the property value itself cannot exceed $1.5 million. The renovations need to specifically “improve the accessibility, livability and safety” of your home and cannot be used to build things outside of your home like tennis courts, swimming pools, or sheds.
Construction must commence within 3 months of the contract date. So if your builder signs a contract on the 27th of June, we must commence construction on or before the 27th of September.
The property must be owned in your personal name. So the property cannot be owned by an entity such as a trust or company as such.
Off the plan apartment or townhouse purchase, yes, we're eligible. A tricky bit of criteria here because you must have signed a contract to buy this property on or after 4th June 2020 and on or before 31 December 2020. Also, the construction needs to start on or after 4 June 2020. Meaning, if you are wanting to buy or have just bought an off the plan property, and construction started before 4th of June 2020, even if you only signed your contract now being after the 4th of June, you won't be eligible. But if you did sign the contract after the 4th of June, construction needs to commence by no later than 3 months after this contract is signed.
One thing to note is that this scheme is not exclusive, meaning you can use it in conjunction with any other scheme you may be eligible for.
Looking to get into the property market with your first home? Maybe consider a new land + construction purchase as you may be eligible for both the First Home Owners Grant of $10,000, the First Home Loan Deposit Scheme with no Lenders Mortgage Insurance, and the HomeBuilder Grant of $25,000. Meaning you could potentially not need to pay lenders mortgage insurance as well as receive $35,000 in cash from the government!
It’s a win any way you look at it.
Clearance Rates & Auction Results – Sydney & Melbourne ahead of the pack!
Clearance rates remained stable over the month of June. Surprisingly, the Australian Bureau of Statistics found that Aussie capital cities recorded a rise in total residential prices over the March quarter.
Melbourne’s residential prices rose by 2.1% and Sydney’s by 1.9% respectively.
This indicates that although prices have risen slightly, buyer activity remains sound and is a good sign our property market continues to thrive; see below for the NSW clearance rates.
Whilst we’re still in the early-mid stages of 2020, the predicted price-drops economists are suggesting are yet to happen.
Although not as much as Sydney, Melbourne also had an increase in auction volumes with 236 properties sold and 533 auctions scheduled.
Victorian clearance rates sat at 65% as of Wednesday 24th June, making NSW and VIC the two states with the highest success rate.
To give you a better indication of these, out of the 768 auction results across Australia, Sydney and Melbourne accounted for 655 of the total proceedings.
With this in mind, we think it’s safe to say where the bulk of the average Australian homebuyers prefer to invest.
If you’re looking at purchasing in either of these states for the future, be prepared to have some competition!
Final Thoughts
The government's home builder scheme is a welcome initiative amongst this period of uncertainty.
With significant changes to your typical construction loan for the better, prospective applicants can feel less of the stress and more of the excitement and anticipation to have their future home built, which is as it should be!
Have a chat with us if this is something you’re interested in, our expert team will do all the hard yards for you so you can enjoy yours once construction is complete and you’ve saved a significant amount of money.
At Black & White Finance, the mission we live by is to break down the industry, to help people find a simple long-term solution to creating wealth.
Our loan approval rate sits at 98%, while the industry average sits at 60%
Our Google Review score sits at 100%, with 5 stars
And we’re super proud of the industry accolades we’ve achieved
If anything above had you thinking what this could look like for you, feel free to reach out to us.
See you in next month’s blog!
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