A Week to Remember

HomeBuilder and JobKeeper to run dry

It’s a pretty precipitous week ahead. On the 28th of this month (tomorrow, or today depending on when you are reading your paper), Jobkeeper will complete its run, the culmination of the single biggest government stimulus program in Australian history with some $90,000,000,000 (worth looking at the zeros, right?) pumped into the economy over the past 12 months under this program alone.

There were some definite winners and losers in this program, but one thing you can’t argue with is that things would have looked a lot scarier without it. Looking back to just prior to the original announcement, there would have been an extraordinary number of property owners (myself included) wondering how they were going to keep a roof over their own heads as the shutdown took place, let alone maintain an investment property. Thank you Mr Frydenberg.

With some 75% (give or take) of original recipients already transitioned out of the support, the impact of its removal won’t be as widely felt as it might have been back at the end of September but there will still be some pain felt in the weeks ahead, particularly in tourism.

In favour on the property front, with interest rates at record lows and rising prices, those most affected have at least some cushioning on their mortgages, with greater equity and lower holding costs. There will be those in the position of needing a property exit, but again the numbers should be far better (less) than might have otherwise been the case.

The other date looming (especially among builders) is the end of Homebuilder on the 31st. Another stimulus program that has hit its mark and more, the proof is in the length of time it takes to get a tradie to your home at the moment, with builders flat out trying to keep up with a vastly accelerated demand following the up to $45,000 on offer (in conjunction with other grants) to home buyers. In a market that is showing distinct signs of undersupply, this boost to new builds is going to be sorely needed, though we’ll need new incentives (whether cash or through tax) to encourage investors to build as well if the rental market is going to reach a level of sustainability in the medium term. I am rather glad that’s someone else’s golden bullet to find though, rather than mine.