A property expert says there are pros and cons to giving people $50,000 to build a new house.
The idea was put forward on Thursday by Registered Master Builders as a way to boost the economy, prevent unemployment and help fix the country's housing shortage.
"History unfortunately tells us that when we have an economic downturn, the construction industry gets hit hard - and it gets hit harder than most industries, so we have to anticipate it," chief executive David Kelly told The AM Show.
Australians can get AU$25,000 from the government there for a new build.
"We think that's interesting to have a look at that, and see how that stacks up... What's the alternative? If we don't do this, if we have more and more businesses going broke, there's a massive cost to that."
Former Property Institute of NZ chief executive Ashley Church said while he normally dismisses plans to "spray money around", there's merit to Kelly's idea.
"I know David Kelly from Master Builders, and he's a reasonably sensible bloke. He's not someone prone to frivolous pursuits."
Firstly, the negatives. Church said construction and real estate are far from the only sectors struggling in the wake of COVID-19.
"Why would you pick this particular sector and favour them - and not just favour them, but favour them with a fairly large chunk of cash?
"Which then raises the question, why would this thing be so generous? In Australia it's AU$25,000, so why wouldn't you make it $25,000? You'd still buy a lot of homes for that, if this was treated as an incentive for home construction...
"And there's no direct evidence that first-home buyers in particular are struggling at the moment. With the dropping of those loan-to-value restrictions a couple of months ago, there's actually an argument this is the most benign environment for first-home buyers whether they're building or buying that we've had in a long time."
Interest rates are also at record lows, making a mortgage easier to service than usual - though house prices are yet to show any signs of falling, despite predictions of a 5 to 10 percent drop.
"Maybe this is just a bargaining tactic," said Church, suggesting Kelly's $50,000 figure was deliberately pitched high.
Church said ultimately he's in favour of the policy though.
"Housing has this massive knock-on effect on the wider economy. It fuels jobs, people pay for insurance, they pay for retail appliances, banking, furnishings, house maintenance, rates - which fund a whole range of things in the city - DIY, electricity.
"There's a whole range of stuff that actually benefits. The multiplier effect that comes from building new property is extraordinary and it can't be underestimated."
Even if people just knocked down old houses to build new ones, while that wouldn't add to the country's stock, it would still have economic benefits.
"The fact that you've actually knocked a house over to do that is probably irrelevant in the bigger scheme of things. It's the fact you've engaged people to actually build this thing."
