Why boosting the Great Start Grant won’t work
Consumer tips provided by REIQ
THE government is increasing the first-home buyer’s grant by $5000 to $20,000, and industry groups have voiced their disappointment at this measure.
Since the announcement we have been speaking to hundreds of people within the community and we have realised how little is understood about this grant or our position.
The Great Start Grant is only available to purchasers who build a brand new home, or buy a house and land package, or buy an apartment off the plan.
The grant has been in operation in its current form since 2012 and was brought in as a measure to stimulate the construction industry.
In the wake of the GFC, when the housing market throughout Queensland (and the rest of the country) faced a significant slump and was struggling to find its footing, the Great Start Grant was designed to create jobs and get the economy moving again.
However, at the same time as the after-effects of the GFC were still reverberating throughout the global economy, Queensland’s mining industry started to slump and that slump continues today.
Throughout regional Queensland, the price of houses has slipped and with lower interest rates, first-home buyers who have been able to save a deposit have had their choice of established homes at bargain prices.
There has been no need – and importantly, no interest – in building a new home.
Over the past four years, only about 4000 grants have been accessed in regional Queensland.
This is a reflection of a lack of need and also a lack of interest in new housing throughout regional Queensland.
Generally speaking, there are very few opportunities to build a new home within reasonable proximity of the CBD, whether you’re in regional Queensland or in Brisbane.
Vacant land simply does not exist within built-up areas.
We know from the way the Brisbane and Gold Coast apartment markets have experienced sustained demand, that Queenslanders are embracing a new style of living, where they want to live within close proximity of work and leisure facilities.
The grant has been more popular in these markets and we agree it has served a purpose, stimulating construction and adding much-needed stock to the supply of dwellings.
But in regional Queensland why would you go through the hassle of building a home on the fringes, which means dealing with complicated plans, tradies, builders and planning departments, when you can buy an established home close to the city, for a really affordable price?
The REIQ has been lobbying the State Government for many years on broadening the first-home buyer grant to include established homes. We know that one of the main barriers stopping firsthome buyers getting into the market is saving the deposit.
The Great Start Grant can be used as a deposit and could help thousands of regional Queenslanders get into the market – if it’s useful for their goal of buying an established home.
Mr Pitt’s announcement last week was disappointing because it is an extension of a failed policy and it is clear the State Government is focused on helping buyers in a small corner of the state, rather than helping all Queenslanders.
Housing is in oversupply (to varying degrees) throughout regional Queensland and this was an opportunity for the government to introduce meaningful support that would have direct impact on these markets and these local economies.
It’s a shame that such an opportunity has been missed.