Keeping up with COVID

It took just a few months for the COVID-19 pandemic to take hold of our lives and change the world we live in. Six months on, Australia has been one of the lucky countries that has managed to keep relative control of the pandemic, in comparison to many others, but there remains a long road ahead. 

While our Victorian colleagues are experiencing the most extreme impacts of COVID-19 on their lives and their businesses, restrictions have eased in most other states and territories. However, even in those places, border restrictions remain a heavy barrier to returning to a new normal and limits on numbers for gatherings continue to remind us that things remain uneasy for now. 

In the midst of the pandemic, the housing industry has continued to show that we are resilient and we are open to change. 

Supporting our industry

To date, HIA has published 17 national member alerts providing advice to members on the rapidly changing business environment, promoting safe work practices and outlining details of government support measures as they have been announced. In addition, a raft of regional member alerts have been published, with a heavy bias on Victoria, providing additional tailored information for members. 

The dedicated COVID-19 page established on HIA’s website at the start of the pandemic has provided a ready reckoner and focus for sharing a much larger library of industry information in the form of fact sheets and updates. This page has supported HIA’s broader communication with the industry since all material is currently available to members and non-members alike. 

There are currently more than 30 information sheets available across three topic areas, including managing your site, business and health. There is also a dedicated page outlining all government support measures, and detailed information on JobKeeper and HomeBuilder.

HIA has published 17 national member alerts providing advice to members on the rapidly changing business environment

Managing sites

The ‘making space on site’ initiative started on 24 March with the publication of ‘An industry guideline to manage COVID-19 on new house sites’. Since then the initiative has grown to include eight guideline documents covering new homes, renovation projects, small commercial projects, kitchens and bathrooms, display homes (by state), new home buyers and homeowners, and returning to work. 

The HIA Safescan Site Induction QR code was released on 9 April to assist people entering a work site to complete a contactless COVID-19 site induction. By the end of July, the Site Induction poster had been downloaded over 1500 times and almost 9000 site inductions were completed. 

Most recently, a new Site Manager QR Code was released for sale. Site Manager provides a business with a branded QR code that can be used to sign in all workers and visitors to a site. The code can be used daily (which is HIA’s recommendation) and provides a digital record for the builder/site supervisor of all people entering a work site. The code is priced at $457 and can be used by one business across multiple sites. 

HomeBuilder begins

HomeBuilder is finally open for business. The National Partnership Agreement to establish the scheme was signed by all states and territories in mid-July, while the application forms and associated online portals went live in early August, some two months after the scheme was announced. 

During lengthy negotiations between the Commonwealth, state and territory governments and industry, HIA gained a number of important changes, concessions and clarifications, making the application process more practical and hopefully increasing the likely take up of the scheme. 

From the start, it was clear that the incentive would not be all things to all home buyers or builders. Income limits, citizenship requirements, price caps and commencement requirements presented barriers for many projects and remain part of the final scheme. There are ongoing concerns about the approach that banks will take and HIA is aware that the banks are directly working with governments to seek to resolve these concerns. 

The response from home buyers and members has been extremely positive, with the June and July new home sales showing a significant rebound in consumer activity. However, the real impact of the grant remains unclear and it will most likely take until October to have a true picture of the effect on housing activity. 

HIA Site Manager provides a business with a branded QR code that can be used to sign in all workers and visitors to a site

HIA gains changes to HomeBuilder

In a major win, just two weeks after the scheme was launched, HIA was successful in gaining the first important changes to the scheme with the release of more details on 18 June. Since then, each state and territory has adopted these changes and provided further clarity on how the scheme will operate. 

Definition of ‘building contract’

The preliminary details of the scheme made reference to a ‘building contract’ but did not provide a definition. It appeared that the two types of contracts commonly used in residential property sales – building contracts and real estate (property conveyancing) contracts – were not understood. 

Based on feedback from HIA, changes were made to define a contract as both a building contract and a sales contract providing scope for off the plan sales to occur (this includes spec homes, house and land packages, apartments, etc.).

Commencement timeframes

Preliminary details of the scheme indicated that a building project needed to commence within three months of signing a building contract. A definition of ‘commencement’ was not set out in the preliminary details. 

HIA raised concerns about the ability to commence work onsite within three months of signing a building contract due to the steps that require completion before work can commence – including obtaining finance approval and building approval. 

In a win for HIA, the federal government adopted HIA’s recommendation to provide scope for an applicant to request an extension of time for unforeseen circumstances, such as finance or building approval delays. Also significant is that HIA secured a definition of ‘commencement’ as site excavation and related works in all jurisdictions.

Each state that has released guidelines regarding the operation of the scheme has adopted this approach confirming that an extension of time of three months may be granted in circumstances, including for example, delays in obtaining council approvals, difficulties in obtaining construction materials and/or subcontractors, and delays in financial institutions assessing and approving finance.

Eligibility, payment and commencement

As more details of the scheme were released a further matter regarding the interplay between securing eligibility for the grant, lodging an application, and when the payment of the grant would be made, surfaced. 

HIA expressed concerns that it appeared that an application to determine eligibility and the payment of the grant could only be made at commencement of the building work being site excavation. Quite obviously, this approach is problematic for a number of reasons, but was most concerning for the finance approval and understanding how the grant would be considered by the banks. 

Based on HIA’s work with state governments, a two-stage process has been adopted in all states except Western Australia. Under the process an applicant may apply for the grant once a contract has been signed and secure eligibility subject to other criteria being satisfied at a later point in time, i.e. that building work commenced within three months.

Applying for HomeBuilder

In early August, all states and territories had opened an online portal to assist home buyers to submit their applications. Now that the scheme is running, HIA is monitoring its progress to determine whether any other changes are needed and we are continuing to brief the Australian Government on how industry is responding.