Home owner grant cut may worsen tough times
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.