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The Western Australian government has announced a temporary boost to its long standing First Home Buyers Grant, increasing the total amount from $10,000 to $15,000.
The boosted payment will apply to contracts entered into between 1 January and 31 December next year for the purchase or construction of a new home. Builders who lay the foundations for their home between these dates will also be eligible.
“Homes must be completed within certain timeframes. If you enter into a contract to build a home, construction must start within 26 weeks from you signing the building contract, and the home must be completed within 18 months after construction commences. If you are an owner builder or purchase a new home ‘off-the-plan’, including apartments, construction of your home must be completed by June 30, 2019,” said WA Finance and Small Business Minister Sean L’Estrange.
However, the focus on newly constructed homes may inadvertently affect the state’s property market, said Hayden Groves, president of the Real Estate Institute of Western Australia (REIWA).
“As an institute we’re a little concerned that the gap between established property and new property for first home buyers is getting larger,” he told ABC News.
“$15,000 is a significant amount of money. Established property in areas that are traditionally first home buyers territory will no longer be as appealing, or even less appealing as they already are, and it will therefore add to additional supply onto the market, which you can argue we probably don’t need in this current market cycle.”
Groves suggested the government also offer the same incentive to first home buyers who eventually purchase existing homes as well.
“The positive side of it is it does bring more buyers into the market and so you do end up with more activity,” he said. “Over time the first home buyer becomes the secondary buyer.”
“But certainly the immediate impact could be a downward pressure on the median house price in Perth.”
Premier Colin Barnett was more optimistic, saying the measure would stimulate the state’s property market by allowing more first home buyers to enter.
“We are conscious about housing affordability and this boost will provide more families an opportunity to get into the housing market,” he said.
He expected an additional 650 first home buyers to buy or build a new home in Western Australia as a result of the boosted grant.
