$40k house grant is a fantasy but customers still live in hope: Tamawood
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A particularly outspoken ASX builder says customers are already saying they might cancel existing contracts if proposals made this week by industry to give new home builders massive grants go ahead.
Queensland builder Tamawood (ASX:TWD) says proposals by the Property Council and Master Builders Association for the government to give new home builders $40,000-50,000 in order to support the industry are backfiring already.
“[They] have caused a significant pause in the signing of new construction contracts and some customers have also indicated they may cancel their contracts if proposals are approved, in anticipation of receiving the grant,” the company said today.
The easing of social restrictions, however, has led to more new enquiries.
The proposal to massively hike grants to people building new houses was made this week and has already been dismissed by the federal government.
On Monday the home building groups launched a campaign to try to persuade the federal government to throw some largesse, saved from the $60bn Jobkeeper bungle, their way.
The Master Builders Association issued a five-point plan asking for $13bn for spending such as giving $40,000 to people wanting to build new homes.
The construction industry has been less hurt than others by the COVID-19 shutdown. Job numbers in the sector fell by 6.5 per cent, less than the national average, while wages dropped by 2.2 per cent compared to 5.4 per cent national average.
Housing minister Michael Sukar dismissed the request saying the construction industry has already been a recipient of the Jobkeeper wage subsidy.
Tamawood was founded by Queensland businessman Lev Mizikovsky who took control of the company last year following an on-market buying spree since late 2018 to build a 51.22 per cent stake when the share price began tanking.
Tamawood stock is currently at six-year lows.