A cash grant program to boost housing construction is likely to cost around $2 billion, with applications far exceeding the Federal Government's expectations.
According to the latest figures, 75,143 households applied for a $25,000 grant under the HomeBuilder scheme as of the end of December, nearly double Treasury forecasts.
In mid-November, the Government was predicting the program would only support the renovation or construction of 42,000 homes at a total cost of $920 million.
Housing Minister Michael Sukkar says he is "pleasantly surprised" by the uptake but would not reveal how much the extended program would cost the budget bottom line.
"Clearly the scheme is going to be larger than originally expected and that's great news," he said.
"It's not surprising that there were relatively higher numbers in the last two months of the year, but no one could have predicted it would be this successful and this high."
He said the Government would publish the full cost of the scheme "at the time of the Budget".
HomeBuilder was introduced at the height of the coronavirus pandemic to respond to fears the construction sector would crash.
Treasury estimates the program is supporting $18 billion worth of residential construction projects.
Under the original program, eligible applicants building a new home or significantly renovating an existing one would receive a $25,000 grant.
Data shows it has been most popular in Victoria, followed by Queensland then New South Wales.
| State/Territory | New Build | Rebuild | Total |
|---|---|---|---|
| NSW | 8,714 | 4,973 | 13,687 |
| Victoria | 17,382 | 4,213 | 21,595 |
| Queensland | 13,507 | 3,106 | 16,613 |
| Western Australia | 11,141 | 783 | 11,924 |
| South Australia | 5,949 | 1,479 | 7,428 |
| Tasmania | 1,521 | 291 | 1,812 |
| ACT | 1,371 | 520 | 1,891 |
| Northern Territory | 178 | 15 | 193 |
| Total | 59,763 | 15,380 | 75,143 |
Shadow Housing Minister Jason Clare welcomed the recent wave of applications, but argued the government's requirement that construction must begin within 6 months of a contract being signed is not feasible for many.
"It was very slow to start off and a lot of tradies in the building game lost their jobs, we're seeing that ramp up now and that's good," he said.
"But a word of warning here: my office is already getting calls from people who applied for the $25,000, signed a contract for a new home, and are now being told by their builder they may not get the money.
"I urge the Prime Minister and the government to apply a bit of common sense here and work with the state governments who are involved in the scheme and make sure that people don't miss out."
The program, which was initially due to end in December, has been extended until March 31, but the size of grants has been slashed to $15,000.
Mr Sukkar urged people still mulling over whether to apply for a grant not to wait.
"We don't have any intentions to extend it further, but as we've always said, we keep a very close eye on the economic circumstances at the time," he said.
"Australians should assume that end date is when it will end."
