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Housing affordability now poses significant problems for first home buyers, but can a government initiative really lure them back into the market? This month, we ask...Should the government increase the FHOG to encourage the return of first home buyers?
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ANITA MARSHALL, Advanced Finance Solutions
None of our clients have been using the special savings incentive schemes that the Government introduced because there is just too much red tape and regulations surrounding them. It would be more beneficial for the Government to increase the grant again similar to the boost they had in place a few years ago. My suggestion would be include an extra $7,000 on top of the existing incentive plus $7,000 for those that are willing to build house/land packages.
HALEY NORTH, Smartmove
When the cash component of the grant was increased, it seemed to simply create competition between buyers that drove prices up. Rather than increasing the cash component, the Government should consider increasing the thresholds for stamp duty exemptions and discounts. Particularly in areas where prices mean that even first home buyers are not receiving any reduction on stamp duty, this could be a strong encouragement for them to return.
BOB CAMPBELL, L J Hooker Finance
Anything introduced to encourage first home buyers to enter the property market would generally be welcomed by both the real estate and the mortgage industries. We have housing affordability at its worst ever levels in Australia today. The first home buyers scheme the Government introduced is seen by most as failing to address the problem faced by first home buyers. The budget was a golden opportunity to at least try something to help first home buyers.
VANESSA WENHAM, Soul Finance
The great Australian dream of owning your home should be made more obtainable. With rents on the increase, first home buyers are less interested in paying someone else’s mortgage and keen to get back into the market. A possible increase of the FHOG is a good idea, but a greater incentive for buyers would be to waive the full amount of stamp duty on purchases up to $750K. This would allow first home owners to purchase a home big enough for their long-term needs.
ELIZABETH FUNG, Investor Capital
I don’t think it will increase first home buyer demand if they do. I have found there are people willing to buy houses based on the FHOG, which they usually find sufficient. The waiving of stamp duty and fees for eligible buyers is also an attractive offer that already exists. I recently read that when the FHOG changed or increased it actually reduced the number of people entering the market so I don’t think increasing the grant will encourage the return of first home buyers.
