CLAIMS that first home buyers are currently struggling to get on the ladder are not supported by official statistics, according to the Property Investment Professionals of Australia (PIPA).
Australian Bureau of Statistics (ABS) data shows the percentage of first homeowners in the market is higher than the historical average.
PIPA Chairman Peter Koulizos said property tax changes proposed by the Federal Opposition were seemingly developed to help first home buyers into the market, however, these figures show they are already active.
“The proposed changes may have the desired effect in improving housing affordability – but at what cost?” Mr Koulizos said.
“Housing will become more affordable because house prices will drop.
“However, there are better ways to assist first-timers than causing everyone’s property price to drop to seemingly make it cheaper and easier for them to get into the market.”
1. Extend the FHOG
The First Home Owner Grant (FHOG) has been limited to new properties for a number of years now, however, PIPA research shows that 80 per cent of first-timers buy established dwellings.
Likewise, only a small percentage of all properties are new.
“It’s unfair that first home buyers are almost being forced to buy a new property, which history shows us also won’t grow as much in value as an existing one.”
2. Limit the FHOG
According to PIPA, the grant should always only be available to those who wish to buy a reasonably priced property, which is already in place in most States and Territories. Mr Koulizos said the FHOG should also be means tested.
“In other words, it should only be available to those on a reasonable income,” he said.
3. Increase the FHOG
In 2000, John Howard introduced the $7,000 grant, however, fast track 19 years, and property prices have increased by a much greater rate than the grant.
“It’s clear that the grant needs to be increased to reflect today’s property prices not what they cost nearly two decades ago,” Mr Koulizos said.
4. Interest-free loans If the government feels that they can’t afford to increase the FHOG, they could instead provide an interest-free loan, according to PIPA. A FHOIFL or First Home Owner Interest-Free Loan could be more easily funded than a grant.
Mr Koulizos said the fund could assist first-time buyers to produce a 20 per cent deposit so they don’t have to pay Lenders Mortgage Insurance.
5. Shared equity schemes The fifth way to help first home buyers into the market is shared equity schemes, which some state governments already have in place.
GOOD FOR EVERYONE:
Helping first home buyers to get into the property market is good for them, good for the property market, good for the economy and good for the whole community.
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