Low take-up of home buyer grants

REINSW Orana division chairman Mark Searle.         Photo: LISA MINNER
REINSW Orana division chairman Mark Searle. Photo: LISA MINNER

FIRST home buyers are unlikely to take advantage of the state government's new grant, according to our region's real estate institute chairman.

Since the grant giving $15,000 to new or yet-to-be-built homes replaced one offering $7000 to any existing home, less than 400 people have taken the opportunity.

Real Estate Institute New South Wales (REINSW) Orana division chairman Mark Searle was not surprised and said it was unviable in the current market because potential buyers could not afford it.

"We've had very, very little inquiry from first home buyers now (since the grant change)," he said.

"In the country, people were not opposed to buying an existing home ... some keen on selling those homes later could have bought a new one next."

With the grant change came the reintroduction of stamp duty, which Mr Searle said was a contributing factor in current decision-making by potential buyers.

For a $300,000 home, stamp duty can be more than $7000, making all the difference.

"From where we (REINSW) see it, people just can't afford it," he said.

"First buyers were exempt from stamp duty ... the old grant was working, it was helping."

Mr Searle, from Landmark Harcourts, said the overall market was slowing down as a result.

"The market would be stimulated if they extended the current grant back to existing homes too rather than just keeping it to new properties," he said.

"Dubbo houses are still selling, but just not to first home buyers."

REINSW president Christian Payne agreed.

"First home buyers are the catalyst for other property activity in the market," he said.

"We need to recognise they need special assistance, as typically the first home buyer is a younger person but not always.

"It would be a travesty if they found it so difficult to buy a property in NSW that they were enticed to another state, NSW can't afford to lose investment dollars."

The Sydney Morning Herald reported Bank of Americal Merrill Lynch chief economist Saul Eslake believes the grants were "a complete waste of money".

"At least by restricting it to people who buy new houses you are no longer bumping up the price of established dwellings," he said.

Statewide figures from the Office of State Revenue reveal 50 grants were paid in the first month of October.

There were 156 grants paid in November and a further 172 in December.

Data released by the Australian Bureau of Statistics showed only 1383 home loans were taken out by first-time buyers in November.

The figure is at a 20-year low.


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