If ever there was a time to consider the purchase of a new home it is now. A grant of up to $20,000 for new home buyers is one new stimulus measure being considered by the Morrison government, which is putting the final touches on a policy that would increase demand for newly constructed residential homes. In a bid to stimulate the residential building sector, the government will this week announce grants of at least $20,000 for purchases of new homes. These grants are designed to prevent residential construction projects from disappearing as the COVID-19 crisis continues. “We are more interested in larger projects and new home builds and things like that because you get towards the end of this year, post about September, economists are telling us, the states are telling us also we are looking at a bit of drop off in the current home building that is going on,” Prime Minister Morrison told 2GB. “That's not good for tradies [and] not good for jobs.” Whilst the government is adamant that the grants will be given predominantly to facilitate large project, there is also scope for the scheme to be extended to cover some home renovations. Infrastructure and construction spending will be one of the first initiatives likely to complement JobSeeker and JobKeeper, with a view to superseding these current payment stimuli. Scheme available to everyone. The good news for purchasers of newly constructed homes is that it will be available for everyone. This isn’t a first home buyer scheme or targeted at a specific property buying segment – everyone is welcome. Treasurer Josh Frydenberg, who will announce the new stimulus measures is attempting to avoid a 50% drop in residential construction due to the COVID-19 pandemic. Individual states had previously adopted similar measures offering grants of between $5,000 and $10,000, however these were primarily targeted at first home buyers. The federal government’s policy will take into account all buyers as it looks to prevent the damage done by COVID-19 to housing supply, whilst also addressing affordability. The scheme will have industry backing. Homeownership is currently at 60-year lows, whilst housing construction is falling, with many analysts believing the construction sector is set to ‘fall off a cliff’ if no stimulus is forthcoming. The Housing Industry Association (HIA) has forecast a near 50% drop in new home building which could put half a million jobs at risk over the next year. Meanwhile, the Property Council of Australia has proposed a $50,000 ‘New Home Boost' grant to purchasers of newly-built homes across the country. This would be limited to the first 50,000 buyers of newly constructed homes and come under a price cap. Master Builders Australia called on the government to introduce a $40,000 new home building grant. This would be uncapped and designed to deliver an extra 14,000 new homes, whilst restoring construction jobs. Is now the time to buy? Anything that adds stimulus to the housing sector could cause house prices to rise, however current trends show that house prices are falling. Australia’s house prices dropped of 0.4 per cent over the month of May. This was the first monthly drop in property values since June last year. CoreLogic data shows the domestic property market has been hit hard with five of the nation’s eight capital cities seeing price falls. This is actually less than was predicted and points to the overall resilience of the property market. We know the overall outlook is uncertain and that prices could fall further, however CoreLogic estimates show sales activity rebounded by 18.5 per cent in May after a drop of 33 per cent in April. ANZ Roy Morgan’s weekly consumer confidence index also rose for the eighth week in a row. Consumer sentiment, house price decline and coming stimulus, along with low interest rates all point to a perfect storm for those looking to break into the housing market and considering new homes to do so. Not to mention, we are also currently seeing a lift in listing numbers and improvements across auction markets as COVID-19 restriction lift. Take advantage of the timing. With interest rates set to remain low for some time to come, now could be the perfect time to start comparing what the banks have to offer. As any stimulus package released by the government this week will be open to all new home buyers, this means property investors, first home buyers, upgraders and downsizers are all in the mix. There are plenty of low interest rates to consider, the lowest being Reduce Home Loan’s variable comparison rate 2.39 per cent. Here’s a list of InfoChoice’s top six lowest to highest interest rates: The government will make its announcement this week, but there’s certainly no harm in taking an early look at the interest rates available and what you can afford. This update is not financial advice. This article is general news and information. Home Loans: The comparison rates are based on a secured loan amount of $150,000 and a term of 25 years. Personal Loans: The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless otherwise indicated in the product name with^, in which case, the comparison rate is based on a loan of $10,000 and a term of 3 years. The comparison rates are for unsecured personal loans only for the relevant amounts and terms. The comparison rates for car loans and secured personal loans are for secured loans unless indicated otherwise. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products. The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible. The information contained on this web site is general in nature and does not take into account your personal situation. Do not interpret the listing order as an endorsement or recommendation from us. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.