But Labor and social housing advocates reckon the government has "missed the target".

Under the government's HomeBuilder scheme those wanting to buy a new home or renovate their existing home will be able to access a $25,000 government grant.

The grants are for individuals earning less than $125,000 or couples less than $200,000, and cannot be used to buy an existing house, while for the renovation grant, the project must cost at least $150,000.

Read more: If you've got $150k to renovate, you hardly need another 25 from taxpayers

Mr Butler owns the Stroud Homes franchise in the Illawarra and Southern Highlands.

He was still working on projects when COVID-19 hit but enquiries and sales had since started to drop off.

"Hearing a fair bit across the board about how our local trades are all quietening down and they're all looking for a bit more work, I think this was needed," Mr Butler said of the package.

"I think all in all from what I know of the package so far I think it has been very well thought out and very well planned."

Mr Butler said he expected it would create an increase in new buildings, which would have a flow-on effect for plenty of different groups.

"We cover such a wide range - from draftspeople to councils, private certifiers to engineers, all the trades, people buying new fridges and homewares for their home. I think it's going to have a huge impact."

However Southern Youth and Family Services CEO Narelle Clay felt the package should have been directed to social and affordable housing, which would still benefit the building industry.

Right next to the Southern Youth and Family Services offices in Warilla was a vacant block Ms Clay said was ready and waiting for a 20-unit complex to be built.

"They've totally missed the target," Ms Clay said of the government.

"I'm completely disappointed and I guess a bit shocked. While I absolutely support any money coming into any housing that will keep tradies and building contractors and suppliers buoyant and continuing to work we're targeting the wrong group at the moment."

Housing Trust CEO Michele Adair said more than 10,000 Illawarra households were just "one more bit of bad luck away from homelessness".

"We've got over 3000 people on the social housing waiting list," Ms Adair said.

"The crisis is in rental affordability not necessarily in home ownership and certainly not in home renovations."

Whitlam MP Stephen Jones didn't question the federal government's attempt to help the construction industry but felt it could achieve that and "build something of a lasting public and social worth" at the same time.

"We've got to make a choice between spending $25,000 a pop on [renovations] versus spending nearly three-quarters of a billion dollars on social and affordable housing," Mr Jones said.

"The priority should be social and affordable housing."