The boost to the First Home Owner grant was an important part of the government response to the GFC in 2009 and there’s no doubt it kept that sector of the market moving. The boost finished but the grant remains at $7,000.
During this recent election campaign the Real Estate Institute of Australia was pushing for the grant to be permanently upped to $15,000, noting that a decade’s passed since the amount was set and in that time Australia’s median house prices have jumped from $220,000 to $519,000. So when introduced the grant was 3.2% of a home price and is now 1.5%.
The other idea the Institute has been running is for first home buyers to be able to access their voluntary superannuation (not employer contributed funds) to buy a home.
“The REIA proposes that a scheme be established which would encourage young Australians to contribute to voluntary superannuation by allowing access to these resources for the purposes of raising a deposit for a first home. The scheme would be an adjunct to the First Home Savers Account but would allow flexibility for the saver to decide whether all or part of the voluntary superannuation payments was needed to augment the home purchase.”
We remember visiting pollies in the mid 1990’s as part of an Institute push for policy change for a similar idea back then. Nothing changed and from what we can tell neither of the major parties have had much time for this idea now.
We’re not sure how many buyers would take advantage of it, but to have a great tax vehicle like super as the place to save for your home seems a great idea.
Your thoughts?
Tags: first home owners, First Home Owners Boost, Real Estate Institute of Australia, superannuation
The reason the house prices soared in 2001 was the home owners grant introduced to ‘combat’ the new GST (or at least get public approval to pass the new tax).
It dramatically swelled the usual number of buyers who would have normally trickled in to the market as their savings grew.
Banks then declared they would take it as a deposit further increasing demand. House prices were further inflated when 20 somethings could get an extra boost when building for a totalof $15,000.
This caused the inflation in housing prices and we continue to have new people entering the market with little to no savings needed.
Consider the rationale of removing all grants instead of generating a debt-laden generation.
Increasing grants will not slow house prices.
From
Someone who lost their house years ago and can no longer get in the market because inflation outstrips savings and we don’t get any grants.
I remember when I bought my first house in 1995. there was no first home owners grant. Interests rate were around 11% and as a single women I couldn’t even be financed by the banks unless I had 20% deposit and then I still needed a guarantor. Today I have 7 properties no thanks to hand outs by the government.
We carry on about young people not being able to afford homes today. I think the problem is most young people today want in a home what most people have worked hard to get over 10 – 20 years. They ideally want brand new homes, go into the outer suburbs you can buy a home aound the 270k mark. Ipswich you can buy a home around 240k mark. So sorry I’m not convinced that we need to be throwing more tax payers money into the first home owners grant.