Housing prices and industries will benefit from extended JobKeeper payments.
The extension to Australia’s JobKeeper program will do more to protect housing prices and industries than the federal government’s HomeBuilder scheme, experts have claimed.
Prime Minister Scott Morrison announced Tuesday that the employment support program would be expanded into 2021, though payments will reduce from $1500 a fortnight at present to $1200 this year and $1000 next year.
At a digital event hosted by the Urban Development Institute of Australia’s Victorian chapter, ANZ economist Daniel Gradwell said the government support would stop the property market “falling off a cliff”.
“That nine-month certainty will go a long way,” Mr Gradwell said.
“It’s a lot more broad based.”
ANZ figures to date show falls have been around 1-1.5 per cent a month.
“That’s a long way from the massive collapse that some of the doomsday preppers are expecting,” he said.
Real Estate Institute of Australia president Adrian Kelly said Wednesday that the extension was a “much-needed lifeline” for the industry, with many real estate professionals now relying on it to keep their job.
“(And) many of these employees have been engaged in providing the essential service of keeping tenants housed during the pandemic,” Mr Kelly said.
RPM Real Estate data shows land sales across Victoria topped 2000 last month, a level not seen since the 2017 boom.
HomeBuilder has provided a short-term boost for the housing industry.
Firm director Luke Kelly said he expected a similar figure in July, but that the numbers would taper in August when most of the titled land eligible for the $25,000 HomeBuilder grants would have been sold.
The grants are available for those building or renovating a home for more than $150,000 and less than $750,000 that commences construction between June 4 and December 31. It is also subject to income restrictions.
However Mr Gradwell said it appeared to have mostly brought forward plans of existing buyers potentially leaving a gap next year and leaving him with “real concerns about what might happen” to that part of the market if the scheme was not extended past December.
Concerns remain about how the construction industry will fare next year.
UDIA Victorian chief executive Danni Hunter agreed the JobKeeper extension had the capacity to benefit the wider property market, including off-the-plan townhouses and apartments, which had seen little benefit from HomeBuilder.
It would also build confidence among prospective buyers who would now be more certain they would still be employed in nine months time, Ms Hunter said.
“You might get the $25,000 at the front to make you more open to buying something, but if you don’t have the employment then you are not going to be able to,” she said.
“And hopefully it gets us to the point where our international borders are opened.”
International migration is expected to be one of the final pieces in repairing the construction industry after COVID-19.
However, Mr Gradwell warned banks would still foreclose on some homeowners.
“I think we will (still) see prices falling by the end of the year, just because uncertainty is going to be very high and no amount of support is going to see government absorbing mortgages for people indefinitely,” he said.
“We are going to see some forced sales.”
Those on JobKeeper payments but doing zero hours of work might find themselves struggling to get a mortgage approved, he added.