Christmas came early for thousands of first-time homebuyers in Queensland after the state government doubled the first homeowner grant to $30,000, but experts say the move It points out that this could worsen housing affordability.
The subsidy for first home buyers buying or building a new home for less than $750,000 has been increased from $15,000 to $30,000.
The expanded subsidy is estimated to help around 12,000 buyers purchase their first home by mid-2025, when the subsidy increase ends and returns to $15,000.
Premier Annastacia Palaszczuk said: “We want to see home ownership rates continue to rise, which is why the government is so focused on support.”
“The existing first home owner grant has been so successful that the Government is doubling the grant program, meaning eligible first home buyers will receive $30,000 in cashback. It will be.”
This is the latest move aimed at helping people enter the property market and increasing new home construction.
Angus Moore, senior economist at Prop Track, said expanding subsidies would help first home buyers but was not a productive way to improve housing affordability.
“The vast majority of subsidies are reflected in prices, driving up demand rather than supply,” he said.
“The best way to solve housing affordability is to build more homes.”
“Subsidies can help stimulate new construction activity to some extent, but the effect is probably not significant, especially at this time when there is little construction activity due to cost and interest rate constraints.”
Mr Moore said state and territory governments could also support first home buyers through further stamp duty reform.
Brisbane house prices rose 7.36 per cent in the year to October to a median price of $773,000, while house prices in the rest of Queensland rose 6.51 per cent, according to the latest Prop Track house price index. The total amount was $622,000.
Real Estate Institute of Queensland chief operating officer Dean Milton said REIQ welcomed the intention to encourage more Queenslanders into home ownership, but said it was better to tackle supply head-on. .
First home buyers in Queensland can receive $30,000 towards the purchase or construction of a new home.Photo: Getty
“We are currently facing some significant challenges in the real estate and housing sector that cannot be solved by offering cash to some buyers,” Mr Milton said.
“We have recently seen a series of new grants at both the federal and state levels, particularly in response to COVID-19.
“While this is great in theory from a construction perspective, increased demand is putting pressure on the cost of building supplies and access to suppliers.
“We generally support efforts to encourage first-time buyers to take the first step towards home ownership, but with the RBA committed to reining in inflation, now is the time to provide further demand-side stimulus. I’m wondering if it’s the right time.”
Brisbane house prices rose 7.36 per cent to $773,000 in the year to October, according to Prop Track.Photo: Getty
REIQ estimated that more than 40,000 homes were needed annually in south-east Queensland alone.
Deputy Opposition Leader Jarrod Brage said the grant renewal was a small step in the right direction, but the government was failing to address housing supply issues.
The expanded subsidy will apply to transactions entered into after November 20, 2023, until June 30, 2025, when the subsidy returns to $15,000.
First-time buyers in Queensland can apply for a grant increase from the first week of January 2024.
The increase in the first home buyer grant comes after the federal government launched the Help to Buy scheme in August this year for up to 40,000 people on low and middle incomes.
Help to Buy and other home guarantee programs have been hailed as a better policy approach to addressing housing affordability than the First Home Buyer Grant.
Under the Help to Buy scheme, the federal government will donate up to 40% of the price of a new home and 30% of an existing home to 10,000 eligible buyers a year.