Home owner grant cut may worsen tough times

Western Suburbs Weekly - - News -

REAL es­tate in­dus­try groups are shocked and dis­ap­pointed by the State Gov­ern­ment’s ax­ing of the $5000 boost to the First Home Owner Grant.

The boost was sched­uled to end on De­cem­ber 31 but will now fin­ish on June 30.

It was in­tro­duced by the pre­vi­ous gov­ern­ment last De­cem­ber, in­creas­ing the grant pay­ment from $10,000 to $15,000 for pur­chases of new homes.

HIA WA ex­ec­u­tive di­rec­tor John Gelavis said cut­ting the boost was a missed op­por­tu­nity to sup­port new jobs and the whole of the econ­omy through one of the tough­est years for new home build­ing in re­cent his­tory.

“The boost has con­trib­uted to a sup­ply of new home­buy­ers into the mar­ket at a time when home build num­bers are be­low the long-term aver­age, so we were sur­prised by the com­ments sug­gest­ing that this stim­u­lus was in­ef­fec­tive, par­tic­u­larly when the La­bor Party had pre­vi­ously sup­ported the ini­tia­tive,” he said.

“Whilst we ap­pre­ci­ate the po­si­tion of state fi­nances, ac­tiv­ity in the hous­ing in­dus­try mul­ti­plies through­out the broader WA econ­omy, boost­ing jobs and train­ing.

“Drop­ping the boost has di­min­ished those op­por­tu­ni­ties.

“The hard­est hits though are to the con­sumers, who look to the gov­ern­ment to pro­vide the cer­tainty on which they can make one of the big­gest de­ci­sions in their lives.”

Mas­ter Builders WA hous­ing di­rec­tor Ja­son Robertson said it was not a good start for the La­bor gov­ern­ment.

“At a time when the Perth prop­erty mar­ket is strug­gling and there’s a need for in­creased de­mand, es­pe­cially for firsthome buy­ers, we’re as­tounded there was no con­sul­ta­tion of­fered to in­dus­try,” he said.

“First-home buyer num­bers have been de­creas­ing over a sus­tained pe­riod and this an­nounce­ment will likely im­pact them even more.

“This isn’t a pru­dent move, not only from an eco­nomic sense but also from a so­cial per­spec­tive.”

Shel­ter WA said the State Gov­ern­ment should be look­ing at other av­enues to im­prove bud­get sus­tain­abil­ity and im­prove hous­ing af­ford­abil­ity.

Spokesman Stephen Hall said if the gov­ern­ment was se­ri­ous about bud­get re­pair, to­gether with long-term sus­tain­able fund­ing sources, it should move from stamp duty to a broad-based land tax.

“Stamp duty has widely been recog­nised to have a detri­men­tal im­pact on res­i­den­tial mo­bil­ity, hous­ing af­ford­abil­ity and ef­fi­cient use of the hous­ing stock,” he said.

“Mov­ing from stamp duty will be more ef­fec­tive for first, and all, home­buy­ers.

“As West­ern Aus­tralia’s pop­u­la­tion ages, this would be an ef­fec­tive re­sponse to sup­port se­niors to down­size and free up hous­ing stock through­out the state.”

The Real Es­tate In­sti­tute of WA (REIWA) has also weighed in on the State Gov­ern­ment’s bud­getary mea­sures, say­ing any levy on in­vestors to help raise State rev­enue would be short-sighted and ir­re­spon­si­ble.

In­vestors could face a $270 levy as part of the Gov­ern­ment’s at­tempts to fix the bud­get, but REIWA coun­cil­lor Suzanne Brown said it was dis­ap­point­ing the in­dus­try had not been con­sulted on any po­ten­tial pol­icy change.

“The pri­vate rental mar­ket is cru­cial to the pro­vi­sion of rental ac­com­mo­da­tion in WA and this levy (would) only in­crease the cost of own­ing a rental prop­erty and make it a less vi­able in­vest­ment op­tion,” she said.

“With va­cancy rates sit­ting at an all-time high of 6.5 per cent,wa in­vestors are al­ready do­ing it tough.

“Slap­ping them with an ad­di­tional cost in an al­ready soft mar­ket is a knee-jerk re­ac­tion that will do more harm than good.”

REIWA un­der­stands the levy would be on wa­ter rates and ap­ply to in­vestors with a gross rental value of $24,000 or more.

At the time of writ­ing, the State Gov­ern­ment had nei­ther con­firmed nor ruled out the levy, how­ever a spokesper­son for Trea­surer Ben Wyatt said the levy was just one of a num­ber of pro­pos­als be­ing con­sid­ered by the Gov­ern­ment and all op­tions would go through the nor­mal bud­getary process, with any changes to be an­nounced by July 1.

HIA WA ex­ec­u­tive di­rec­tor John Gelavis.

REIWA coun­cil­lor Suzanne Brown.

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