REIWA WANTS HOMES GRANT BACK

Midland Reporter - - Residential -

REIWA is call­ing on the State Gov­ern­ment to re­in­state the es­tab­lished homes grant as fresh data shows new builds have over­taken es­tab­lished home pur­chases.

In May, es­tab­lished homes rep­re­sented 46 per cent of first-home buyer pur­chases, ac­cord­ing to the in­dus­try body’s fig­ures.

This could fall fur­ther in June, with Hous­ing In­dus­try As­so­ci­a­tion data re­leased re­cently show­ing newly built homes in­creased 21.1 per cent in the month as first-time buy­ers scram­bled to qual­ify for the $5000 First Home Own­ers Grant (FHOG) pay- ment boost be­fore it ended on June 30.

The FHOG was $7000 for new builds and es­tab­lished homes when it was in­tro­duced in 2000.

REIWA data shows from then un­til 2013, when the grant for es­tab­lished homes was cut to $3000, es­tab­lished pur­chases rep­re­sented 72 per cent of to­tal trans­ac­tions on av­er­age.

Be­fore the es­tab­lished homes grant was re­moved in late 2015, es­tab­lished pur­chases had fallen to about 55 per cent of trans­ac­tions.

New builds, which can re­ceive a FHOG pay­ment up to $10,000, have over­taken es­tab­lished pur­chases sev­eral times in the past 18 months.

REIWA pres­i­dent Hay­den Groves (left) said the in­sti­tute’s data clearly showed abol­ish­ing the FHOG for es­tab­lished prop­er­ties had af­fected the es­tab­lished homes mar­ket.

There were also reper­cus­sions for the trade-up mar­ket, with first-home buy­ers not ab­sorb­ing list­ing stock at the rate they once were.

“The grant un­fairly pe­nalises buy­ers want­ing to en­ter the es­tab­lished mar­ket by only pro­vid­ing as­sis­tance to those who choose to build a new home,” he said.

The State Gov­ern­ment is not con­sid­er­ing in­tro­duc­ing a grant for es­tab­lished homes in the up­com­ing bud­get.

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