Eligible home builders will receive $25,000 from the federal government under the new package.

The federal and state governments indicated late Thursday an existing $20,000 Victorian grant for regional first homebuyers could "complement" the new package.

A state government spokesman did not rule out that grant could be combined with the federal grant, offering first homebuyers who build a new home $45,000.

Meanwhile, south-west builders say the $25,000 federal grants, which can be received by a wider group of homeowners for new builds and major renovations, will likely keep builders busy amid fears of a coronavirus-caused slowdown.

Warrnambool builder Stephen O'Keefe said the new package was also "perfect" for the city's custom build market because existing grants only targeted first homebuyers.

"Most of the new homes we do aren't first homeowner," Mr O'Keefe said.

He said the city's planned residential building works remained "buoyant" but there were fears about the next 12 to 18 months.

Mr O'Keefe's projects employ six full and part-time workers and up to 45 sub-contractors.

"We are still receiving enquiries at the moment. There is still confidence in this area," he said.

Warrnambool builder Wayne McNaughton agreed the city was already busy with building. "It could flood the market," he said.

But some say the grant's $150,000 minimum price tag for renovations is too high.

Warrnambool builder of 47 years Ray Hollingsworth said the spend for renovations should be halved in regional areas to include smaller jobs for "builders who just live on those".

"I think if people are spending $75,000 here they should get assistance," he said.

Warrnambool resident Isaac Bermingham said it was disappointing the federal government wasn't giving more assistance to low income earners.

"There are people sleeping on the streets whilst the wealthy are given stimulus packs," he said.

Another home owner said she couldn't afford to spend $150,000 to obtain the $25,000 grant.

"We would be way worse off if I borrowed money to do renos," she said.

"How can anyone afford to do the renovations at this time?," said another.

The HomeBuilder grants are available until the year's end and require construction to begin within three months of the contract date.

Eligible homeowners can build a new home if the finished property is worth up to $750,000, or if they undertake a renovation between $150,000 and $750,000 on a property currently worth under $1.5 million.

The house must be a homeowner's permanent residence.

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