Albany hit by real estate boom as COVID-19 building grants lead to regional land grab

Buying land for her first home was never on 31-year-old Albany woman Jody Ironmonger’s five-year plan. But that all changed this month, when the State and Federal governments unveiled separate stimulus packages just days apart, to jump-start the residential construction sector in the wake of the COVID-19 crisis. On June 4, the Federal Government’s expected $680 million plan to revive the industry was revealed. Under the scheme, grants of $25,000 were open to new homebuilders or existing homeowners to substantially renovate their homes until December 31. The WA Government unveiled a $117 million package three days later, opening grants of $20,000 to new homebuyers to bolster the existing $10,000 First Home Owner Grant. For potential first-homebuyers like Ms Ironmonger, the hunt was on. She signed off on her first piece of land within two weeks. “It let me purchase my first home. I wouldn’t have been able to do it without the grants,” she said. Ms Ironmonger said before the grants were announced she had not even considered the possibility of buying land this soon. “It’s probably something we’ll never see again,” she said. “As soon as it was announced I met with the mortgage brokers to see if it was something I’d be able to achieve. “We got lucky because it is just crazy out there. “There was hardly anything left, we just got really lucky that one fell through and we were able to jump on it.” Ms Ironmonger was among many to make the leap, with Albany real estate agents reporting inquiries were soaring and available land was selling fast. Connection Realty Albany director and licensee Steve Walker said the demand over the past few weeks had been “absolutely abnormal”. “It has been very, very busy. I’ve got 19 blocks under offer and I’ve only got another seven to sell,” he said. “I think it has really given the building industry a shot in the arm.” Mr Walker said there was “very little land left to sell” that was not under contract. “It started the Sunday of the State grants being announced. On Monday I was writing contracts,” he said. “It was just one after the other.” Merrifield Real Estate director Jeremy Stewart said the team had been “signing contracts every day”. “There has been a lot of demand for house and land packages and we are finding land that is level, ready to go and well priced is getting really strong interest,” he said. “I feel that there is going to be a shortage of residential land very shortly. “Just about everything has sold out in Oyster Harbour, Yakamia and McKail. “Banks and brokers are going to be under a lot of pressure to get finance approvals through in a satisfactory time frame, especially when they already are dealing with COVID-19.” For first-homebuyers like Ms Ironmonger, there is now a rush to lay the foundations of a new home within the grants’ time frame. Smartline director and personal mortgage adviser Eli Hayes said those looking to capitalise on the government stimulus needed to know the limitations of the grants and move quickly. Ms Hayes said that at this stage, first-homebuyers could only use the existing $10,000 Keystart first-homeowner grant towards a deposit. The $20,000 State Government COVID-19 stimulus grants could only be used once construction had started and foundations were completed. “That needs to be within six months of signing a building contract,” she said. The $25,000 Commonwealth grant, only available to Australian citizens, could be used once the foundations of the home were complete — which had to fall within three months of signing the building contract. Ms Hayes said the biggest hurdle was getting approvals through. “It’s going to come down to finance being approved in time,” she said. “They need to move quickly because what we are seeing is the cream has gone and the range that is left is limited.” Master Builders Great Southern regional manager Linda Gibbs said activity across the Great Southern region had “increased dramatically” with the combined stimulus measures. And the boom was showing no signs of slowing down. “We expect the strong trend for first-homebuyers to continue along as there is titled land available,” she said. “The stimulus is only available until the end of the year, which will create really solid levels of demand for the building industry. “The Great Southern region was performing fairly well prior to COVID-19, so the challenge for the sector will be the availability of titled land.”