Colin Brinsden and Daniel McCulloch | AAP
Scott Morrison says the success of his government’s HomeBuilder program has set the residential building sector up for the next two years.
The program, which helps Australians either build a house or renovate an existing home, has received more than 30,000 applications above Treasury’s original forecast.
“This program has been really effective,” the prime minister told Sydney’s 2GB radio on Wednesday.
“This has more than doubled our expectations for that program, it’s set residential building up for the next two years.”
More than 75,000 households have applied for the $25,000 cash grants, with 80 per cent of applications seeking to construct a new dwelling.
The remaining 20 per cent of applications have been for major renovations.
Housing Minister Michael Sukkar expects the demand-driven scheme to support up to $18 billion worth of residential construction projects.
The cost of the construction stimulus scheme could have doubled to about $2 billion, after a surge in applications in the final two months of last year.
“The final cost will be reconciled and accounted for in the budget, but I think it is fair to say it will be higher than originally anticipated,” Housing Minister Michael Sukkar told reporters in Melbourne.
“This is a phenomenal outcome for our tradies and for our economy at a time it needs it most.”
The grant program was originally due to expire at the end of December, but was extended until March 31 at a reduced rate of $15,000.
New home sales almost doubled in December compared to November as people clamoured to get the full benefit before it was wound back.
Meanwhile, the Westpac-Melbourne Institute monthly consumer sentiment index for January fell 4.5 per cent, retreating from a decade high seen in December.
“Since the last survey … we have seen domestic border closures, the emergence of COVID clusters in some states, and the sharp upswing in COVID cases overseas, notably the US and the UK,” Westpac chief economist Bill Evans said.
However, at an index of 107 points and above 100, Mr Evans said optimists still clearly outnumber pessimists.
The index is 15 per cent higher than a year ago and 41.5 per cent above the low seen last April and during the depths of Australia’s economic downturn.
“It still points to healthy consumer sentiment,” Mr Evans said.