REIQ CEO Antonia Mercorella has called for the First Home Owners’ Grant availability to be extended beyond the limitations of new constructions or the purchase of a new home, saying that because of these constraints, the grant has become “virtually redundant”.
She says the latest Queensland government budget, announced at a time when construction of new homes has ground to a screeching halt, has missed a valuable opportunity to implement key reforms and bring forward creative solutions to assist Queenslanders towards home ownership.
“Despite a construction sector in crisis, and the government itself conceding that builders and building supplies are rare as hens’ teeth, the First Home Owners’ Grant continues to overlook established housing, remaining restricted to new construction,” Ms Mercorella says.
“With rising construction costs and financial entry barriers making building or purchasing a brand-new home simply unfeasible for many first homebuyers, surely it’s time to extend this initiative to established housing options.”
Meanwhile, a report undertaken for the Australian Housing and Urban Research Institute (AHURI) this month reveals Australian governments spent more than $20.5 billion supporting first homebuyers (FHBs) in the decade to 2021 through FHB grants, stamp duty concessions and other cash grants.
The report, Assisting First Homebuyers: an International Policy Review, asked if such assistance expanded access to home ownership to those whose entry would be otherwise delayed or impossible or made the cost of home ownership more affordable and less risky.
Research found the Australian FHB assistance measures primarily act to bring forward first home purchase by households already close to doing so, rather than opening home ownership access to households otherwise excluded. In doing so, these measures add to demand and hence house prices.
Direct Collective managing director Mal Cayley says in essence the report is correct. He says FHB schemes are a typical government policy with great intent that fail in the execution as they are not solving the core issue.
“FHB have market entry affordability issues due to a lack of supply. If there was sufficient supply then there would be more competition in the market for buyers and property would be more affordable.
“It is a typical policy of pretending to solve issues by promoting a popular policy that is easy to digest and therefore ‘vote worthy’, when in effect, FHB grants, in a supply crisis, harm first homebuyers.”
He says the effects of the pandemic, massive increase in construction costs and supply chain challenge have contributed to fewer properties in the market but a growing population to consume them.
“With fewer properties to meet demand, competition is high and those who can afford more can outbid the market.”
He says there is only answer to make property affordable for FHB and that is supply.
“We need a dramatic, pivoting change in housing policy to deal with this crisis. We need all kinds of built form, predominately the missing middle (homes such as units, terrace homes, duplex etcetera), in all price categories to unblock the system.”