First Home Owner Grant to double for buyers in regional Victoria
By Peter Lusted and staff
Updated Fri at 2:53pm
From July 1, the First Home Owner Grant will double to $20,000 for new homes valued up to $750,000. Doubling the grant offered to people buying their first home in regional Victoria will help push house prices down, Premier Daniel Andrews says.
It does not apply for established homes.
The Government said it expected the increase would help about 6,000 first-home buyers.
The Opposition argued the Government should cut stamp duty if it really wanted to help improve housing affordability, saying the move would actually increase prices.
"Property developers across regional Victoria will be rubbing their hands together. This is a terrific outcome for them," Shadow Treasurer Michael O'Brien said.
"If you do see an increase in property prices in response to this grant, which is likely, that will increase the stamp duty that first-home buyers have to pay.
But Premier Daniel Andrews said that was "simply wrong".
"If you are building more houses because there are more people able to purchase them, you add to the total supply," he said.
"If you're adding to the total supply of houses that puts downward pressure on houses."
Increase could see house prices increase, industry groups say
Housing Industry Association acting regional director Keith Banks said an increase to the First Home Owners Grant could see house prices rise.
"We've seen this in the past with First Home Owner Grants … where the unintended consequences, it can actually push the price of housing up because developers, and those who have existing houses, will actually see it as an opportunity for the price to increase," Mr Banks said.
"Any move in this way needs to be carefully and closely analysed."
Mr Banks said stamp duty in Victoria was among the highest in Australia, and taxes could account for up to 38 per cent of the price of a new detached home.
"We'd rather see a reduction in those overblown taxes. That would be a firm and real move towards improving housing affordability."
Real Estate Institute of Victoria chief executive Gil King agreed prices could be pushed up slightly, but said if buyers did their research they would benefit.
"If they shop around very cleverly and do their homework they can certainly pick up a good-priced home and move into it with the benefit of having a $20,000 injection into their deposit."
Grant will boost appeal of living in country Victoria: Pallas
Felicity Maher has been renting in Bendigo for a decade, but eventually wants to buy a place in the city centre.
She said a boost to the First Home Owner Grant should cover both newly built houses and existing ones.
"The vacant lots that I've seen for sale in inner Bendigo have been quite expensive. I've then got to factor a new build with that," she said.
"The price of that is just a lot more, a brand new dwelling is so much more than existing."
Treasurer Tim Pallas said doubling the grant would increase the appeal of living outside of Melbourne for young families.
"This is such a substantial boost to the position and the capacity of first home owners," he said.
"It'll put them on that first rung of movement into their first home, so it'll make it easier for young people in regional Victoria to buy and live in their community."
It follows an announcement from the Andrews Government earlier this week that will see 100,000 housing blocks rezoned and the creation of 17 new suburbs in key growth zones on Melbourne's fringes.