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With state elections on the horizon, the CEO of Lendi Group has urged governments to “think of new strategies” to help more home buyers and update their existing grants.
The CEO of Lendi Group, David Hyman, has said that state governments need to review their home buying schemes and grants to better support home buyers.
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With Queensland having held its state election on Saturday (26 October) and in the lead-up to other state elections around the country in 2024 and 2025, Hyman has said the time was right for governments to think of new strategies to help “struggling Aussies beat the property crunch and get themselves into a home of their own”.
Hyman said: “It is important to recognise that each state has a different market, including different value drivers and, of course, individual issues. Therefore, each State Government needs to ensure that the grants they are announcing provide true value in today’s market and will genuinely assist buyers trying to purchase a home, not just mimic what has been popular previously.
“We urge all state governments to reassess their current offerings in light of the market conditions buyers are dealing with, be adaptive to the reality of their constituents and offer genuine support that makes a difference to the bottom line of purchasers.”
Brokers have been busy supporting many home buyers to access government support to help them buy their homes, with several Aussie brokers having said that many new home owners who recently received the keys to their brand-new properties would not have been able to achieve this milestone without the support of the First Home Owner Grant (FHOG).
The grant provides a financial boost of $30,000 towards purchasing or constructing a new home, including off-the-plan properties, substantially renovated homes, or new builds (as long as the applicant uses the property as their principal place of residence for at least six months within a year of ownership).
However, the pricing limits of this grant have been called into question given that the total property value, including land and any contract variations, must not exceed $750,000.
The current grant amount will remain in place until 30 June 2025.
It comes as Queensland faces some of the lowest home ownership rates in the country, as the state combats familiar problems like rising construction costs for new builds, high median house and unit prices across the state, and slow wage growth compared to the rising cost of property.
For example, Brisbane property prices have risen by 13.2 per cent over the year to date, according to CoreLogic, sitting at $875,040 as at 31 August 2024.
Moreover, the HIA-CoreLogic Residential Land Report showed that the median price of a residential lot in Australia reached $351,044 in the June quarter of 2024, rising 2.2 per cent in the quarter to be 6.0 per cent higher than at the same time the previous year.
HIA senior economist Tom Devitt said: “The price of a lot of residential land reached a new all-time high in the second quarter of the year, driven by acute shortages and rising tax imposts.
“In Brisbane, Adelaide and Perth, the price of greenfield lots of land reached all-time highs in the first half of the year. Brisbane prices are even catching up to Melbourne. These record prices are being reached alongside – at best – unremarkable volumes of lot sales.
“Policymakers must work to reduce constraints and costs on new home building. This includes measures as set out in the HIA Planning Blueprint consisting of accelerating planning processes and approval times to facilitate increased infill development as well as speeding up the release of greenfield land and increased funding for critical enabling infrastructure to make projects shovel-ready faster.
“Meeting government housing targets and improving housing affordability requires a significant boost to home building. Increasing land costs and uncertainties on industry and households will have the opposite effect.”
The calls for a review of home buying schemes and price caps follow similar calls made by brokers earlier this year about the federal government’s Home Guarantee Scheme. Speaking to The Adviser, brokers said that property price caps were no longer reflective of the market, limiting the number of eligible properties that can be purchased through them.
[Related: Housing market ‘diversity’ widening, flags CoreLogic]
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