Trebling of First Home Owners Grant Vital for State Budget

HIA has called on the State Government to provide first home owners with $14,000 for new homes built which will maintain the current $21,000 First Home Owner Boost.   

HIA Regional Executive Director, Stuart Clues said “The Federal Government has provided boost to the FHOB in October last year to $21,000 for first home buyers building new homes which has been a huge success and there is a strong case for the State Government to provide funding in tomorrows State Budget for its continued delivery.

“A phase out of the Federal Government’s $21,000 first home owners incentive commences in October of this year and HIA calls upon the State Government to fund the gap to provide ongoing support to what has been a successful mechanism in providing the basic need of shelter for many Tasmanians, particularly the young.

“In Tasmania the success of the scheme has seen first home buyer numbers swell in March this year to 26 per cent of the market, whereas 12 months ago this figure was sitting as low as 13 per cent. Meanwhile the number of first home buyers entering the new home market is heading towards 15 per cent, well up on the single digit share prior to the First Home Owner Boost.

The Victorian State Budget recently acknowledged the benefits of providing affordable housing, increasing housing stock and resultant job creation by providing first home owners with a state based boost which coupled with the Federal grant will see up to a $36,500 grant provided for first home owners in that state as of July 1.

“This boost provides an economic injection to the new housing market provides an effective way to stimulate up to 20 businesses in the broader economy with each single house build, creating jobs and helping address the chronic shortage of housing across Tasmania .”

“Housing supply is simply not keeping up with the demands of a growing population and HIA estimates in Tasmania that as a population proportion, around 30 per cent of private renters, or over 12,000 households are in rental stress.

“The acute shortage of new housing stock remains the major driver in pushing rents higher and keeping rental vacancies at record low and rents continue to show no signs of easing in most capital cities of Australia and there is a high risk this number will increase as rent and employment pressures persist throughout the 2009-10 financial period.

“This grant has provided Tasmanians with the means to achieve the basic necessities for shelter and home ownership which previously was out of reach, due to rental vacancies that are sitting consistently between one and two per cent across the State.

“HIA believes a State based boost would also assist the state in meeting current and expected demand for housing and this measure would continue to recognise the importance of boosting the supply of affordable housing stock.

“This pivotal budget must consider the evidence that proves the worth of continuing to look at policies to stimulate the residential sector, as clearly such policies as the $21,000 Grant have a positive impact on construction, employment, and on the demand for manufactured products,” he said.