First Home Buyers Grant changes iminent – what will the impact be ?

“First-home buyers told to build or miss out on first-home buyer’s grant”.

That’s the headline from the Courier Mail article yesterday announcing the proposed changes to First Home Owners Grant. The article went on to say that QUEENSLANDERS are worried a new first-home owner’s scheme for new builds will increase
already-inflated house prices.

The Courier-Mail has revealed the Newman Government will replace the existing $7000 first-home buyer’s grant
with a $15,000 handout to first-time buyers purchasing newly-constructed

First-time buyers will be given until October 11 to sign contracts before the permanent
demise of the $7000 grant, which was originally introduced by former prime
minister John Howard to offset the cost of the GST.

The $15,000 grant will be available from September 12 for properties valued at up to

Treasurer Tim Nicholls said the grant was a better-targeted response to previous attempts to
stimulate the construction sector.

“The grant does not have an expiry date, which means it will give confidence to the
construction and property sectors over the long term,” he said.

“The First Home Owner Construction Grant is yet another component of our
positive plan for this vital sector of the economy, which creates jobs for

But not everyone is convinced the new deal will be a win for people trying to
break into the property market, with readers worried the
changes will actually lead to rising property prices.

A cynical ‘Bro of BrokeValley’ wrote: “Yeah…of course up go the price of
new houses by $15,000.”

While ‘Scott of Brisbane’ questioned who would really benefit from the scheme.

“I’m sure this will be great for the construction industry but as soon as someone buys a
brand new home it will be instantly devalued by $15,000 because they can’t sell
it as new anymore. The construction industry is the winner here not home
buyers. I don’t think this idea has been thought out very well,” he said.

Housing Industry Association executive director Warwick Temby said there was no doubt
the scheme was a win for the state’s struggling home building industry.

“The immediate introduction of the grant from tomorrow will also mean that there
will be no hiatus for the industry. Buyers will be able to act straight away
rather than wait for legislation to change,” he said.

The decision to eliminate the $7000 grant, which cost taxpayers about $117
million a year, is also likely to hand the Government significant savings.

The former Bligh government attempted a similar construction sector stimulus with $10,000
for all buyers, but it did little to attract buyers in the depressed market.

However, the industry argues the so-called building boost had little chance of success while
the $7000 grant for existing homes continued.

“All (the $7000 grant) served to do was increase the value of established property by
about that same measure,” UDIA president Matthew Wallace said.

The move comes as the first-home sector of the market has shown signs of improvement. Office
of State Revenue figures show 5413 grants were handed out in the June quarter,
compared with 4005 in the corresponding quarter in 2011.

The full details of the changes will be revealed today in the State Budget and we have a look at our sales this year to see exactly who purchased what and whether the impact on the local established property market will be dramatic or not.

Graham Lynham


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