Christmas has arrived early for first-home buyers in Queensland as the state government has doubled its first homeowner grant to $30,000. The increased grant is applicable to those purchasing or building a new home valued at less than $750,000. While this move aims to assist thousands of buyers in realizing their dream of home ownership, it may have unintended consequences on housing affordability.
Premier Annastacia Palaszczuk expressed her desire to see home ownership rates continue to rise and stated, “The existing first homeowner grant has been very successful, which is why our government is doubling the grant program – meaning eligible first-home buyers will receive $30,000 cashback.”
However, experts caution that the expanded grants may not be an effective solution for improving housing affordability. Angus Moore, a senior economist at Proptrack, explains, “In large part, the grants get capitalized into prices and boost demand rather than supply. The best way to solve housing affordability is to build more homes.” He also suggests that stamp duty reform could be another way for state and territory governments to support first-home buyers.
The Real Estate Institute of Queensland (REIQ) acknowledges the intent behind encouraging home ownership but emphasizes the need for addressing supply issues directly. Dean Milton, the chief operating officer of REIQ, states, “We’re facing some significant challenges in the real estate and housing sector at the moment that can’t be solved by providing a cash boost to some buyers.” He points out that increased demand due to grants has put pressure on building supplies and availability of tradespeople.
While the doubled grant may provide immediate assistance to first-home buyers, concerns remain about the overall impact on housing affordability. Brisbane home prices have already grown, with a 7.36% increase to a median value of $773,000 over the year to October.
Frequently Asked Questions (FAQ):
1. How much is the increased grant for first-home buyers in Queensland?
The increased grant for first-home buyers in Queensland is $30,000.
2. What are the eligibility criteria for the grant?
To be eligible for the grant, first-home buyers must be purchasing or building a new home valued at less than $750,000.
3. How long will the expanded grant be in effect?
The expanded grant will be in effect for transactions entered into between 20 November 2023 and 30 June 2025, after which it will return to $15,000.
4. What is the opinion of experts regarding the impact of the grant on housing affordability?
Experts suggest that the grants may not effectively improve housing affordability as they primarily stimulate demand instead of addressing supply issues. Building more homes is considered a key solution.
5. Are there alternative approaches to addressing housing affordability?
Programs like the federal government’s Help to Buy scheme, which provides contributions towards the cost of homes to eligible buyers, have been identified as potential policy approaches that could be more effective in addressing housing affordability.