The state government’s new budget has seen the knife taken to the long-standing $7000 handout for buyers making their first moves into the world of home-ownership. Buyers have until October 11th to grab the grant, then it will only apply to new dwellings (rising to $15,000). Many in our industry have screamed blue-murder and predicted dire outcomes. And predictably they’re telling buyers to rush in to beat the deadline. So for the record – yes, quick, you need to buy a home now!!
But regular readers might be used to some scepticism from us. In Brisbane’s inner city most first home buyers are spending $400,000 to $500,000, and we’re not convinced the $7,000 was a deal-maker, and nor will it be a deal-breaker. Interestingly the grant hadn’t been increased since 2000 when it was introduced as part of the GST initiatives. So with no indexing in that time its relevance has faded strongly over 12 years.
Home buyers prove time and time again that government twisting and turning does very little to impact their decision-making. Consider the July reinstatement of the home owner concessions on stamp duty (coincidentally around $7000) with our new leaders heralded for rejuvenating property sales. Barely a blip in the transaction numbers. Why? Our guess is the decision to spend half a million bucks revolves around bigger issues. And our guess is that much the same will apply to this first home grant change.
It’s less than a 1.5% price rise for most. Buying your first home is life-changing stuff. Having a piece of Australia of your very own, the security and peace of mind it provides. Home is a sacred place for all of us. And while that $7000 was very handy the banks are now finding new ways to help first time buyers into their homes. When rents are rising, interest rates are very low and your mum and dad keep changing the locks, you’ve got plenty of reasons to buy.
And the impact of this change on the broader market? According to Matusik Insights first home buyers took out just 11% of all home loans across Queensland last year. Life will go on.