Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Cautious Approach for First Home Buyers; Times Are Changing for First Home Buyers Erle Levey and Felicity Richardsontake a Look

Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Cautious Approach for First Home Buyers; Times Are Changing for First Home Buyers Erle Levey and Felicity Richardsontake a Look

Article excerpt

BUILDERS have embraced the change to first home buyer incentives announced this month. At the same time, a number of industry professionals remain cautious.

Replacing the long-standing First Home Owners Grant, the new First Home Owner Construction Grant (FHOCG) was introduced by Queensland Premier Campbell Newman to encourage more people into the new property market and boost the construction industry.

According to the Real Estate Institute of Queensland (REIQ), thousands of state-wide first-time property buyers may delay purchasing their first home.

REIQ CEO Anton Kardash said the decision by the State Government to remove the $7000 grant in favour of a $15,000 grant for new homes would impact the majority of prospective first home buyers.

aREIQ analysis of Office of State Revenue (OSR) figures show only 24% of first home buyers opted to buy a new home when the First Home Owners Boost, which featured up to $21,000 for new-builds, was in play during the GFC,a he said.

aThe main reason is new homes are usually too expensive for first-time buyers and are often located in outlying suburbs where young people do not necessarily want to live. New units and townhouses can also be more expensive than established and often have higher body corporate fees than older apartments.a

Mr Kardash said the removal of the grant failed to take into consideration the complexity of the real estate market. aThe property market is complex and historical facts also show that first home buyers don't necessarily buy new homes,a he said. a[approximately]While we understand the State Government is stuck between a rock and a hard place and needs to find savings while also stimulating the economy, we don't believe this is the way to achieve these objectives.a

Over the June quarter, according to the OSR, more than 5400 First Home Owner Grants were paid in Queensland compared to 4000 over the same period in 2011. aThe first home buyer segment of the market has been one of the few positives over recent times, so we are likely to see their level of activity decrease significantly once the grant is removed next month,a Mr Kardash said.

Meanwhile, Master Builders, Queensland's peak body for housing and construction, says the First Home Owner Construction Grant will be a vital stimulant for building activity and imperative to Queensland's economic recovery.

Master Builders executive director Graham Cuthbert said the association had called on the government to consider focusing the First Home Owners Grant on new homes only, together with an increase in the grant to $15,000 in Master Builders pre-budget submission to the government.

aWe wanted the government to consider specific measures in the State Budget that would address the current low building activity levels, so we are delighted that our calls have been heard and actioned,a he said. …

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