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.
Announced by the previous government last December, it increased the grant payment from $10,000 to $15,000 on the purchases of new homes.
Treasurer Ben Wyatt said the boost was not an effective mechanism for stimulating additional construction of homes and given the disastrous state of State finances, any ineffective spending needed to be removed.
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 home buyers 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.
“While 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 housing director Jason Robertson said it was not a good start so early in term for the Labor State Government.
“At a time when the Perth property market is struggling and there’s a need for increased demand, especially for first-home 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.”
Rather than simply axing the $5000 boost, Shelter WA said the State Government should look 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, home buyers.
“As WA’s population ages, this would be an effective response to support seniors to downsize, and free up housing stock throughout the State.”
REIWA supported Treasurer Ben Wyatt’s statement that the boost was not an effective mechanism for stimulating additional construction of homes, and said its analysis showed the introduction of the boost in January had done little to stimulate activity levels in the new-build market.
At the time of the grant increase, REIWA president Hayden Groves said the institute was concerned the boost would widen the gap between established and newly built properties for first-home buyers.
REIWA councillor Suzanne Brown said now that the First Home Owner Grant was returning to $10,000, REIWA hoped this would help to even out the playing field, albeit marginally, between the established and newly-built market.
“However, there is still work to be done to help first-home buyers purchase an established property as the gap remains significant,” she said.