Cash for new homes the key to saving jobs, says industry

A $50,000 "new home buyer" incentive could prevent the residential construction sector from falling off a cliff within months, saving potentially hundreds of thousands of jobs, according to property industry groups.

The stimulus measure has emerged as the key plank in a series of proposals from the property development and construction sectors' major lobby groups, including the Housing Industry Association (HIA), the Urban Development Institute of Australia (UDIA) and the Property Council of Australia.

"It's unashamedly about trying to generate work so we can keep people employed," HIA managing director Graham Wolfe said on Monday.

"It is to generate that demand so we have slabs on the ground between now and Christmas.

"We've never been in this situation before. We've never seen so many jobs at risk. It's about avoiding the unimaginable."

The protracted nature of contracting new homes to buyers then building and finishing them – a process that can take nine months – means the economic slowdown caused by the pandemic will take some months yet to have its full impact on the residential construction sector.

By then it will be too late to introduce any support or stimulus to the sector, as it would take many months more to flow through into active building sites.

At its height two years ago, the sector employed more than 1 million people across the sales and production process involved in building new homes and apartments.

On the HIA's analysis, the equivalent of as many as 100,000 jobs are already at risk in the sector. That could rise to 500,000 as the drop-off in new home sales since March continues.

"The number of sales walking in the front door has dropped substantially, in some cases by 90 per cent," Mr Wolfe said

"There have been cancellations too. By the time we get to July and August there will be very little work.

"I'm concerned that the number of commencements, the number of slabs that we pour in the second half of this year will contract to such a level that we lose the equivalent of another 400,000."

The proposed new home buyer incentive could potentially deliver an additional 20,000 home building starts in the second half of this year, which would keep people in jobs across the sector through next year.

The UDIA said the incentives should aim to deliver as many as 60,000 new starts including across next year, as part of a $4 billion stimulus fund.

As well as a $50,000 new home buyer incentive, the HIA and the UDIA have called on the federal government to allow an additional 10,000 allocations under the First Home Loan Deposit Scheme to be targeted at new home building only.

Further support for the embattled industry could come through a "HomeKeeper" insurance scheme, with the National Housing and Finance Investment Corporation underwriting interest-only loan payments for buyers who are building new homes.

More broadly, cutting red tape, improving planning systems and accelerating infrastructure needed for shovel-ready housing projects are among the proposals from the property sector.

As well, the restoration of strong net migration – steadily rising population growth has been a long-term support for the property sector – would be a significant boost to the residential construction industry, according to the lobby groups.