The REIQ is disappointed Curtis Putt turned down its proposal to expand the first home owners' grant. Photo: Bradley Kanaris Queensland Treasurer Curtis Pitt has come under fire from the Real Estate Institute of Queensland for knocking back its proposal to expand the first home owners’ grant to existing properties, as opposed to only new homes.
Mr Pitt on Friday announced the Palaszczuk government would not expand the grant, while reporting he expected the number of first home buyer accessing the grant to double from last financial year’s numbers.
Buyers can access a $20,000 grant if they have not previously owned property by the end of June. A one-time, 12-month $5000 boost was added last year. In July, it will go back to the usual $15,000, but the REIQ hoped the government would use the opportunity to re-expand the grant’s scope to include all properties.
The grant gives first home buyers a $20,000 leg-up until the end of June. Photo: Louie Douvis
“Regional Queensland is facing unique challenges and the government must tailor its response to those challenges,” REIQ chief executive Antonia Mercorella said. “First home buyers in regional Queensland need more help than their southeast Queensland counterparts – and letting them use the grant to buy an established home would be a good start.”
Ms Mercorella said falling prices in regional Queensland was indicative of housing oversupply and boosting construction through the grant had worsened the issue.
“Twenty-five regional mayors have given us their full-throated support for broadening the grant to established homes and this State Government simply isn’t listening,” she said.
Economists have suggested expanding the grant would drive up house prices. Photo: Bradley Kanaris
But Master Builders Queensland said Ms Mercorella was diminishing the importance of the construction industry and the grant.
“I don’t understand why the REIQ can make the point it doesn’t work in regional areas,” deputy chief executive Paul Bidwell said. “If you look at finance approvals, they’ve been healthy, as well as the number of grants.”
First Home Buyers Australia director Daniel Cohen said the grant did not need to be expanded or the $5000 boost extended. “We actually think Queensland’s got it right,” he said. “Other states like NSW have got it wrong.”
Master Builders said the boosted grant made the construction industry boom in the past six months. Photo: Louie Douvis
Stamp duty concessions across the board for Queensland first home buyers could put many existing properties within their reach, Mr Cohen said. “We do believe [expanding the grant] will make a difference, but don’t believe it’s the most effective value for money policy.”
Domain Group chief economist Andrew Wilson agreed cutting stamp duty was a more effective policy and said expanding the grants could have a negative effect. “In some markets it eventually just adds to the price of the house,” he said.
Dr Wilson said it was important to support the construction industry. “It’s not just supporting home ownership, it’s about supporting an economy,” he said.
Ms Mercorella said the real estate industry was being forgotten. “Real estate has long been this state’s golden goose, but this government is in danger of killing off the goose,” she said.