The HomeBuilder scheme was meant to prop-up the construction industry during the coronavirus pandemic, but now suppliers are struggling to keep up.
The program's success has resulted in reported shortages of building supplies within the residential construction industry as well as contractors, who are working tirelessly to complete projects.
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Tas City Building director Steve Simeone said that demand had been so significant in the industry it had caused shortages in supply materials.
"There's a bit of a struggle for materials at the moment in Tasmania, so we're really struggling to get timber and there's a lot of price rises as well," he said.
"With our industry so busy, we've got issues with contractors as well it's tight and there's a lot of work to do with councils prior ... I think we're all working together to make it happen."
The program has seen 2636 applications in Tasmania to date which federal Housing Minister Michael Sukkar, who visited Tasmania on Saturday, said defied initial expectations.
"It's fair to say that when we look at our initial estimates Tasmania is probably running three times greater than we thought," he said.
"When we put together HomeBuilder, we were hoping to keep the industry afloat ... I suppose never in our dreams did we think it would be this big and this busy."
"I think that the industry is coping really well to date and we'll just keep an eye on it."
According to the Australian Bureau of Statistics, the number of owner occupied loans for construction in the three months to January 2021 was up 104.2 per cent and the number of detached dwelling approvals during the three months to January 2021 was up 60.6 per cent, compared to the same time last year.
In addition, the Real Estate Institute of Australia found that the number of first home buyers in Tasmania increased by 51.4 per cent over the past year.
HomeBuilder was extended to March 31 to ensure all the applications could be fulfilled by the builders and contractors.
The program was designed to create demand in the construction industry to off-set the impact of COVID-19, but the scheme was such a success both the Tasmanian and federal governments extended their programs to March 31.
Brittany Goss, who is building at Perth, said the homebuilder grant had made her dream of owning a home a reality.
"I would almost daresay without it we wouldn't have the house," she said,
"With renting for the last three years it's not your own home .. I am really excited to get in there."
Last year, state Finance Minister Michael Ferguson confirmed applicants now had six months instead of three to start construction on their project after signing the building contract.
This was to help ease the supply issues which were being created by the unprecedented demand for the new houses due to HomeBuilder.
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