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The Queensland government announced on Monday (20 November) that it plans to double its First Home Owners Grant for new home buyers looking to purchase off the plan or build a new home from $15,000 to $30,000.
The state government estimated the grant would go on to support around 12,000 buyers unlock their homes by the boost’s expiry date of 30 June 2025.
However, this move has drawn criticism from the Real Estate Institute of Queensland (REIQ). Chief operating officer of REIQ, Dean Milton, said while the association has welcomed the state government’s effort to encourage home ownership, it would have “preferred to see supply tackled head-on”.
“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,” Mr Milton said.
“We’ve seen in recent times, especially in response to COVID-19, an array of new grants at both a federal and state level.
“While that’s great in theory from construction perspective, it’s brought forward high demand and put pressure on the cost of building supplies and the ability to access tradespeople.”
Mr Milton added that the REIQ “generally support[s] initiatives that give first home buyers a leg-up”, however, has questioned on whether or not “now is the right time for more demand side stimulus” when the Reserve Bank of Australia (RBA) remains steadfast in taming inflation.
South-East Queensland currently requires an excess of 40,000 houses per annum and incentives on the “demand side are unlikely to assist in delivering this target,” according to Mr Milton.
“Builders in Queensland are already facing the highest construction costs in the country and we would expect this measure to drive up those costs further,” he said.
“We are in a situation where Queensland is at the bottom of the ladder nationally when it comes to rates of home ownership and is at the top of the scale when it comes to building costs – and that’s what has got to turn around.”
The COO added that the government needs to focus on addressing supply side issues and warned that first home buyers should be aware that the grant “has its limitations”.
“You’re only able to take advantage of this grant if you’re a first home buyer who is buying or building a brand-new home valued at less than $750,000 including land and any contract variations – which in reality can be a really rare find,” he said.
While potential buyers would indeed struggle to find a house or land package underneath the $750,000 threshold in the metropolitan areas of Queensland (Brisbane, Gold Coast), regional customers would be “helped immensely” according to Mortar Finance broker Giles McKinlay.
“I think a scheme like this will really help in regional areas, there tends to be more land in regional areas as you go north in Queensland and the price point is a lot lower than in South-East Queensland, so I’d say it’s a real positive for regional customers,” Mr McKinlay said.
[RELATED: Investor support has been ‘ignored’: REIQ]
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