REIWA is calling on the State Government to reinstate the established homes grant as fresh data shows new builds have overtaken established home purchases.
In May, established homes represented 46 per cent of first-home buyer purchases, according to the industry body’s figures.
This could fall further in June, with Housing Industry Association data released today showing newly built homes increased 21.1 per cent in the month as first-time buyers scrambled to qualify for the $5000 First Home Owners Grant (FHOG) payment boost before it ended on June 30.
The FHOG was $7000 for new builds and established homes when it was introduced in 2000.
REIWA data shows from then until 2013, when the grant for established homes was cut to $3000, established purchases represented 72 per cent of total transactions on average.
Before the established homes grant was removed in late 2015, established purchases had fallen to about 55 per cent of transactions.
New builds, which can receive a FHOG payment up to $10,000, have overtaken established purchases several times in the past 18 months.
REIWA president Hayden Groves said the institute’s data clearly showed abolishing the FHOG for established properties had affected the established homes market.
There were also repercussions for the trade-up market, with first-home buyers not absorbing listing stock at the rate they once were.
“The grant unfairly penalises buyers wanting to enter the established market by only providing assistance to those who choose to build a new home,” he said.
“As a result, they are finding it increasing difficult to enter the WA property market
“Housing affordability remains a significant issue for many West Australians.
“We should be making it easier for all first-home buyers to enter the market, not just those who choose to build their home.”
REIWA is asking the State Government to reintroduce a $3000 grant to encourage first-home buyers to purchase an established residential dwelling.
Mr Groves said it would lead to increased activity levels across the entire WA property market, particularly the trade-up section.
“Increasing the demand for established housing will have a knock-on effect to other areas of the market, allowing more WA households to ‘right size’ into accommodation that suits their changing needs,” he said.
“More importantly, higher levels of activity in the established residential property market will mean more transfer duty revenue for the State Government.
“At a time when state finances are declining, any policy which leads to revenue generation should be given real consideration.”
The State Government is not considering introducing a grant for established homes in the upcoming budget.
Treasurer Ben Wyatt said the government was facing a budget repair task of unprecedented scale and had to be conscious of every dollar it spent.
“With that in mind, it was decided that the more prudent decision was to continue to fund grants on new builds because of the positive impact that money has on the creation of jobs,” he said.
“Eligible first-home buyers purchasing a new or established home will continue to be exempt from duty on homes valued up to $430,000 or vacant land valued up to $300,000, and to receive a concessional rate of duty on homes valued up to $530,000 or vacant land valued up to $400,000.”
Assistance available for first-home buyers
Buying or building a new home
First Home Owner Grant: Up to $10,000 for eligible buyers
Stamp duty concessions: No duty on vacant land up to $300,000 with a concessional rate of duty up to $400,000. No duty on home purchases up to $430,000, with a concessional rate of duty up to $530,000
Home Buyers Assistance Account*: Not available on purchases of land or a plan to build. Available for partially built homes
Buying an established home
First Home Owner Grant: Not available
Stamp duty concessions: No duty on home purchases up to $430,000, with a concessional rate of duty up to $530,000
Home Buyers Assistance Account*: Available for established purchases up to $400,000
*Purchases must be made through a licensed real estate agency