About 900 Tasmanians have registered their interest in the federal HomeBuilder scheme aimed at providing stimulus to the construction sector.
A state HomeBuilder program was announced to operate alongside the $25,000 federal grant which 488 people have registered their interest for.
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Combined they give prospective home owners access to $45,000 in government grants for home builds commenced after June 4.
Master Builders Tasmania executive director Matthew Pollock said the data, provided by the state and federal governments, showed the programs were having an impact.
He said the programs had the potential to support up to $250 million of activity in the construction sector. "We were staring at a shortfall, potentially over the next 12 months, of 800 houses as a result of the impacts of COVID-19," Mr Pollock said.
"What the registrations demonstrate, I think, is that this scheme will go a long way to bringing those projects back into the market."
Builders have raised concerns about the ability to complete houses in accordance with the narrow eligibility criteria. To be eligible an applicant must not earn more than $125,000 as a single or $200,000 as a couple.
Building must also have commenced within three months of the contract being signed. Hotondo Homes Launceston director John Dykman said it would be difficult for first home-buyers to meet that requirement.
"The contracts need to be signed by the 31st of December and then a start needs to be made by the 31st of March to be eligible for the grant," Mr Dykman said.
"Design, documentation and the permit process takes around three months. Obviously we've been inundated and we have all these commencements to do that it's going to be really difficult to fit them all in before the 31st of March.
"That's something we have to try and manage ourselves as best we can. But we don't want to see people miss out because builders aren't able to make a start on a site."
The federal scheme addresses some of these concerns by allowing states some discretion around deadlines. "It provides the state governments who will be administering the scheme discretion to ensure delays under business as usual circumstances, so things like permit approvals, do not get in the way of people accessing this scheme," Mr Pollock said.
He wants a similar clause in state legislation, to be tabled in parliament this week.