Where will the HomeBuilder scheme boom?

By Gerv Tacadena

A study unveiled 10 regions where properties for renovation meet the eligibility criteria

A study by CoreLogic found 10 regions where a huge number of properties can qualify under the federal government's HomeBuilder scheme.

The HomeBuilder scheme aims to provide a $25,000 incentive to eligible Australians who are constructing a new home or are planning to start a renovation project.

The CoreLogic study focused on the renovation component of the scheme and found that Melbourne's South East region, which spans from Mount Waverley to Bunyip, has the highest number of properties eligible for the grant.

For a property to be qualified for the renovation component of the scheme, it has to have a median value below $1.5m. Furthermore, the renovation project to be carried out in the property should be worth between $150,000 to $750,000.

The table below shows the top 10 regions where the highest number of properties under $1.5m can be found.

The CoreLogic study focused on the renovation component of the scheme and found that Melbourne's South East region, which spans from Mount Waverley to Bunyip, has the highest number of properties eligible for the grant

Elizabeth Owen, head of residential research at CoreLogic, said the eligibility criteria, particularly for renovations, might affect the interest of potential applicants.

"For areas where dwelling prices and incomes are relatively low, this may lead to owners over-capitalising on renovations, where they cannot recoup the cost of upgrades to the property," she said.

Owen said the scheme might have a limited impact on the delivery of new construction work, given its reliance on the decisions of potential applicants to purchase and renovate a property in a highly uncertain economic climate.

It will, however, be beneficial to those who are already planning to renovate prior to the COVID-19 outbreak.

"The kind of planning and financing that needs to be organised for a six-figure renovation means that it would largely be taken up by those who have already started the process," she said. "Similarly, for homeowners, and first home buyers in particular, those looking to commit to a property purchase within the next six months would already have been saving a deposit and primed to buy.”

More Mortgage News