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The industry remains divided over whether or not the government should increase the First Home Owner’s Grant.
According to The Adviser’s latest weekly straw poll, 54.3 per cent of brokers believe the government should inject further funds into the FHOG.
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Of the 359 respondents, 45.7 per cent said the government should avoid increasing the stimulus given to first home buyers.
While any increase to the FHOG would encourage first home buyers to jump on the property ladder, it seems the industry cannot decide whether or not this would actually be a positive thing for all property buyers.
Starr Partners chief executive officer Douglas Driscoll believes any additional first home buyer incentives would ultimately have negative consequences.
“Obviously when the federal government gave extra stimulus incentives to first home buyers, it encouraged them to go out and buy property. The problem was, many average Australians weren’t financially ready. So when interest rates began to climb at the end of last year, many found themselves in trouble,” Mr Driscoll told The Adviser.
“Across all the big hubs of Australia delinquencies are on the rise and that will be more prevalent as interest rates go up once or twice before the end of the year.”
As such, Mr Driscoll said the government should avoid injecting extra funds into the FHOG in order to avoid further increases in delinquencies.
And Mr Driscoll is not alone. Elizabeth Fung from Investor Capital agreed that any increase to the FHOG would not have a positive impact on the property market.
Rather, Ms Fung said the government should waive all stamp duty fees, which would help all buyers.
“When the FHOG increased, it reduced the number of other buyers entering the market, so on that basis, I don’t think the government should increase the grant,” she said.
But LJ Hooker Finance’s Bob Campbell said anything that encourages first home buyers to get onto the property ladder would be welcomed by both the real estate industry and the mortgage industry.
