Housing help ‘redundant’

THE first-home owner grant has become “virtually redundant” on the Gold Coast because the very few new houses being built are too expensive.

However, Treasurer Cameron Dick says there are no plans to change the grant, warning the government must be careful not to further fuel the increasing cost of housing.

Data obtained by the Bulletin shows the number of $15,000 grants issued on the Coast had collapsed from 1048 in 2020-21 to 460 last financial year, saving the state government almost $9m.

In contrast, Ipswich snapped up 915 grants and the Sunshine Coast 769.

The total number of grants across Queensland fell from 11,710 to 8347 in the last financial year, saving the government just over $50m, Treasury statistics show.

The stunning decline in grants comes as median house prices soar on the Gold Coast to more than $1m in most suburbs.

The Queensland firsthome owner grant gives buyers $15,000 towards the purchase of their first home, but it must be a new build and valued at less than $750,000.

The $750,000 threshold has not been raised since the grant was introduced in September 2012.

Real Estate Institute of Queensland chief executive Antonia Mercorella said the grant had become “virtually redundant” on the Gold Coast. “To ensure that grants for first-time buyers remain relevant and useful, threshold amounts must be regularly reviewed,” Ms Mercorella said.

“The first-home owner grant was established in its current form in 2012.

“The threshold of $750,000 was arguably appropriate at that time when the annual median house price on the Gold Coast was $470,000 (as at March 2012).

“Today (as at March 2022), that annual median house figure sits at $888,000 – representing a whopping 89 per cent growth.

“Further, at a time when construction of new homes has reached a screeching halt, the first-home owner grant has become virtually redundant for most given it’s only available for new construction or the purchase of a new home,” Ms Mercorella said.

“... With rising construction costs and financial entry barriers making building or purchasing a brand-new home simply unfeasible for many first-home buyers, surely, it’s time to extend this initiative to established housing options.”

The supply of new homes on the Gold Coast has also been affected by a shortage of land, restricting the options of first-time buyers and adding to the upward pressure on prices.

In April, Zone Planning Group director David Ransom warned that developers were unable to find new sites.

“We have run out of greenfield land in this city,” he said.

“... We deal with developers all the time who’re looking for townhouse/greenfield sites for low-density product on the fringe of the city – there’s none left.”

Despite the low uptake of first-home owner grants on the Gold Coast, Mr Dick rejected the suggestion it was “redundant” and told the Bulletin the state government had no plans to raise the $750,000 threshold.

“I don’t think it’s redundant,” Mr Dick said.

“Obviously we monitor these issues over time, but we need to be careful not to fuel the growing cost of housing in any greater fashion than is happening already through the market.

“The purpose of that grant is really to help early entry into the housing market, but at this stage we wouldn’t be seeking to change it.”

A Treasury spokesman said that the government’s “primary focus” was instead increasing supply.

“The first-home owner grant (FHOG) is one element in a broad suite of measures the Palaszczuk government has to address housing affordability,” the spokesman said.

“... The government’s primary focus on housing affordability is increasing supply, through mechanisms such as the $200m Growth Acceleration Fund announced in this year’s budget,” the spokesman said.