The success of the HomeBuilder program has led to more than 2700 grant applications received to date.

The influx of demand has overwhelmed the industry and created shortages in building supplies and contractors amongst other things. Applicants have six months from the date of their signed contract to start construction on the build. The sheer number of applications has meant some builders will be hard pushed to meet that deadline for some applicants.

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Chris Reissig Builders owner Chris Reissig said the lack of supplies and time to receive a commencement letter were the main issues facing builders.

"As soon as I sign a contract I've got six months to get it in but [State Revenue Office] and the banks are taking that long to give me a commencement letter," he said.

"There's a shortage on timber and once you get to base stage and you can't get any further because you're waiting on timber."

Tas City Building director Steve Simeoni said the administration process was a major hurdle.

"We've dealt with the issues of supply shortage, it's definitely an issue but we've dealt with that," Mr Simeoni said.

"The whole industry has been inundated and we've found [the administration] process has been the biggest hold up of all."

The situation has led to the Master Builders Association asking for a commitment from both major parties to allow for greater flexibility to the timeframes for the HomeBuilder grant.

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The suggestion would see the State Revenue Office able to review projects on a case-by-case basis and apply discretion for potential extensions to the project timeline to ensure no one misses out.

"At the moment there is no discretion within the rules to provide for any flexibility beyond that six months," Master Builders executive director Matthew Pollock said.

"What we'd like to see is there is discretion provided on a case by case basis so the State Revenue Office can assess legitimate claims where an extension might be granted."

Mr Reissig said he believed local builders may struggle to meet the six-month deadline.

"I see in the next month some builders not meeting the obligation, it's too tight and I am going to be very close, I can push some buttons but I am still going to be very close," he said.

"We might not be able to pour a slab but the SRO doesn't care about that. The government should step in and say if the SRO has taken four weeks."

Darren Goodyer from B&D Goodyer Developments said the HomeBuilder grant had created an unenviable situation for homeowners. "There's that much work, we're going into a property boom and there's a housing shortage ... at the end of the day people have to stop relying on the government because all it is doing is inflating [prices]," he said.

Mr Goodyer said instead of the time-constricted HomeBuilder grants the government should have reduced stamp duty.

"It is still an incentive to buy a new house, they've got to buy a new house and they get a reduction and that way the older houses become more on the market for the younger ones to buy," he said

"When I was 21, you didn't have a brand new house you bought something you can afford.

"[Stop] with all these quick fix grants, anyone who thinks they're getting 30 or 40 grand doesn't realise they're paying 100 grand at the other end extra [due to increased prices]."

However, the Labor Party as well as other local builders are supportive of the suggestion from Master Builders.

Labor building and construction spokeswoman Jen Butler said that the party would support providing increased flexibility to HomeBuilder.

"Industry has made it clear to government it's unrealistic to think that can be achieved within the [six] month period allowed under the scheme. Financing, planning timeframes, land supply and title issues are all likely to cause delays, and the [six months] off will leave some new home builders ineligible to receive the money," she said.

Growth Minister Michael Ferguson said the Premier had written to his federal colleagues to address the issue.

"The Premier wrote to the Federal Minister for Housing Michael Sukkar strongly advocating for greater flexibility to the Homebuilder scheme, which has been a recipe for success in Tasmania."

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