• The commencement of new private sector housing projects jumped 4% over the September quarter of 2020, with the value of major home alterations and additions climbing by 6.4%.
• Fresh data from the Australian Bureau of Statistics shows that commencements on other private sector dwellings dropped over the same period.
• The figures come as the Morrison government praises the HomeBuilder subsidy scheme, which is projected to cost the taxpayer $2 billion.
• Visit Business Insider Australia’s homepage for more stories.

The number of new private sector houses under construction jumped 4% in the September quarter of 2020, bucking the trend of broader economic panic during Australia’s COVID-19 lockdowns.

Construction industry figures released by the Australian Bureau of Statistics (ABS) on Wednesday show 26,726 commencements of new private sector houses in the months leading up to September, up from 25,397 in the June quarter.

The September figures are also up a full 7.3% from the same period in 2019.

The story is markedly different for the commencement of other private residential dwellings, which dipped 7.5% to 14,887 over the quarter.

The spike in new houses broadly correlates with the federal government’s June announcement of the HomeBuilder subsidy package, which initially promised $25,000 to eligible owner-occupiers building a new home, buying one off the plan, or launching into major renovations.

In addition to new home commencements, the ABS reports a 6.4% jump in the value of new home alterations over the quarter. That’s a fair few driveways and verandahs being added around the country.

Despite a relatively slow uptake, Housing Minister Michael Sukkar today said around 75,000 households eventually applied for a $25,000 HomeBuilder grant in 2020.

“HomeBuilder was designed immediately to inject confidence and encourage buyers back into the market to offset the devastating effects of the pandemic on the residential construction industry,” Sukkar said.

The scheme – which is now projected to cost roughly $2 billion – has been a “phenomenal outcome for our tradies and for our economy at a time it needs it most” Sukkar added.

The construction industry, unsurprisingly, is also chuffed about the subsidy package.

“The surge in new home construction being driven by HomeBuilder has averted the valley of death that was confronting residential builders and tradies due to the pandemic,” said Denita Wawn, CEO of construction industry group Master Builders.

Despite harsh lockdowns and early disruptions to construction worksites, Sukkar said Victoria recorded 21,595 HomeBuilder applications in 2020 – the most of any state or territory.

While the package has been celebrated by the Morrison government, the construction industry, and owner-occupiers looking to spruce up their digs, the HomeBuilder scheme has faced its fair share of criticism.

After it was announced, Opposition Leader Anthony Albanese slammed its barrier for entry, with applicants required to spend at least $150,000 on their new build or home improvement to qualify for the subsidy.

The Labor leader also criticised the program for funnelling money into private projects, instead of bolstering funds for public housing development.

Applications for the HomeBuilder grant scheme will end on April 14. Don’t expect the full $25,000 sum to stick around, though: Eligible folks who enter a contract to build or renovate between January 1 and March 31 onwards are now in line to receive $15,000.

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