Economists: HomeBuilder to push property values down

Economists have warned that the Morrison Government’s HomeBuilder subsidies for new dwelling and renovations could drive property values down:

HSBC chief economist Paul Bloxham said with lower immigration, there was “going to be less growth in households to drive demand for housing”…

“I would have thought the combination of these things actually puts more downward pressure on housing prices,” Mr Bloxham said.

“We’ve already had a housing boom in Australia, a very large one that delivered a lot of new supply. So, boosting supply even more when demand is weakening, I think presents a challenge for house prices in the established market.

“We need housing construction to continue to fall to match the demand side”…

AMP chief economist Shane Oliver said… the program “may be good news for millennials and those who find the housing market unaffordable”.

In the short-term, HomeBuilder is likely to support house prices by supporting employment. However, once the dwelling are built, HomeBuilder will add to overall housing supply and place downward pressure on both prices and rents.

Leith van Onselen


  1. Seems like rank nonsense to me.

    Home builder doesn’t add jack to supply, it just helps clear stock at higher prices. Stock that would’ve been cleared anyway.

    • Reus's largeMEMBER

      HRH has to move all those AirBnB’s that he had that are now up for weekly rent …. those “new” builds hardly used …

    • Yea I agree. Just like how NG and CGT reductions “don’t increase prices” because they ‘add to supply’. BS.

      It’s not about the supply of houses; it’s about the supply of money to pay for however many houses there may be.

  2. Wont it just add 25K to the cost of building a house or renovation. If you go to a builder now an get a quote will they just not jack the price up 25k by default. Is that not what happens every time a government payment of any kind increases. When pensioners get a rent subsidy increase their rent goes up the next day. When child care subsidy is increased child care costs go up. The money would be better spent if the government built more houses to increase supply. Or better still something that would not cost any money at all. Cut immigration to zero for the next 10 years and deport all the illegal workers and fake refuges. Also stop all foreign students from ever having an immigration pathway here. That will make housing more affordable for Australians.

    • Reus's largeMEMBER

      The plan is not to help housing be more affordable, the plan is to keep SFM’s mates in business and being able to afford their 2021 model Lambo

      • Nah mate that’s racist. The Greens just proposed that foreign students get travel concessions because otherwise it’s racist.

    • Strange EconomicsMEMBER

      Currently 0% of housing is affordable for pensioners or Newstart.. So a rent assistance could only help.

      But then they are not part of the liberal base, so no votes in it.

  3. Those who’ve got $150k renos or houses to build have either already planned it or are rich enough and don’t need the support to do it anyway

    • Strange EconomicsMEMBER

      Only the Bank of Mum and Dad have the cash. Low incomes huge renovation? Follow the money

      The inherited wealth stays with the elites. The kids on a string to the old’s capital gains tax free wins
      are not going to propose money be spent on social housing.
      This policy is perfect for keeping inequality.

  4. Hopefully it reduces demand for existing houses. Everyone else can fck off to their cookie cutter new builds in a bare paddock somewhere. I’ll have a proper house thanks.

  5. matthewMEMBER

    Shh don’t tell anyone.In addition everyone I know is really pissed because it appears like a gift to the rich.Mums the word

  6. Jumping jack flash

    2 words, or perhaps one big one – equitymate!

    Pretty sure I saw the PM quoted saying something about people being able to access the equity in their homes or something like that this morning on the bus to work.

    This is an equitymate bribe so people take on more debt to “do up the house”. Its an admirable undertaking. Anyone with 150K of equity is probably thinking about doing it already.

    Nobody has 150K just laying around, and if they did they wouldn’t need an extra 25K. Come on now! I think everyone is correct in assuming that.

    The problem that is causing the economy to tank, the main problem is the debt isn’t growing fast enough to keep the economy afloat after everyone scrounges around cutting their spending and tightening their belts trying to find the spare 100 billion+ to pay to the banks each and every year for the interest on their mortgages.

    If everyone with an existing mortgage who also has 150K in equity takes on an additional 150K of debt as “equitymate” at the low price of 2.6% or whatever it is to do up the house (and pay a few trades), then the debt will grow and the economy will be saved!

    After all, 150K is far less than the price of an entirely new mortgage, those things are expensive, around a million, depending on where you buy and relatively fewer people already with a mortgage can afford another one in these economic conditions.

    Considering that a lot of people took on Howard’s FHOG to get onto the ladder back in 2006 or whenever it was, and then Big Kev splashed it around again in 2010, they will very likely have 150K in equity now, if they haven’t already taken it out for something else.

    The point is that this has little to do with trades and builders and everything to do with the debt.
    I think more people will take it up than anyone thinks.

    • Fair points but honestly how many people who already have $150K equitymate and who want to do a reno didn’t already know you could use equity to fund it?

      • MountainGuinMEMBER

        150K ahead in an offset account works, but going back to the bank to extend to mortgage when home prices are falling and jobs are at risk could be tricky.

        • Yes, very true.

          I think the fact it is less than $700m in total says it’s a token handout not a real program.

    • A bit late with my comment. I was driving and I heard the housing minister who was on the radio interview quoted as saying “this adds a multiplier effect as people spend X times more than the grant itself”. They see it as a better stimulus that’s not as bad to the budget. The answer is always to lean on households to take ever more and more debt rather than corporations or the government itself.

      • BubbleyMEMBER

        “Kang kang kang….”

        That’s the sound of a can getting kicked down the road.

    • us is 75c USD. Place your bets anyway you want… 75c is always around the corner

  7. “However, once the dwelling are built, HomeBuilder will add to overall housing supply and place downward pressure on both prices and rents.”

    – yes, but what we don’t yet realise is that Scotty from Marketing is this very minute devising a plan to maintain NOM at 300,000 heads per annum, at any cost and via whatever means required in order to prop up that demand!! #WeFarmPeople right!

  8. This is the LNP’s PINK BATTS moment !! lets hope it burns to the ground in spectacular fashion

      • ‘works’ ? as in it works to line the pockets of some boomers wanting to undertake a renovation that only a boomer could afford?
        Notice the means-testing is based on income, not wealth ? A boomer with $5million in the bank could qualify for this welfare rather easily, which has just made me vomit in the kitchen sink.


        #boomersWorld #Straya #Vomit

        • drsmithyMEMBER

          I doubt there are large numbers of low-income boomers – or anyone else – with lots of cash in the bank and a house worth <1.5m.

          IMHO the conditions are all a bit weird mostly to prevent more than a relative handful of people from using it.

          • sorry you don’t think there are many boomers in Australia with a house worth >$1.5M who have a low income? WTF are you talking about?! this hand-out was carefully carved out for boomers!

          • drsmithyMEMBER

            Less than $1.5m.

            If it’s worth more you don’t qualify for it (to do a reno).