Back in February, following the slump in first home buyer (FHB) mortgage commitments after the first home buyers’ grant (FHOG) on pre-existing dwellings was cut, the Real Estate Institute of New South Wales lept to the defence of FHBs:
…the Real Estate Institute of NSW (REINSW) is already campaigning for the reinstatement of first home buyer incentives in NSW for purchasers of existing properties as demand from this key sector continues to fall…
“We are calling on the Treasurer to not only reinstate first home buyer incentives that were removed in 2012, but to also explore additional opportunities to assist first home buyers to take their first step onto the property ladder,” says REINSW president Christian Payne.
“It is not too late for the NSW Government to reverse its decision to abolish from 1 January 2012, the stamp duty exemption/concession and from 1 October 2012, the $7000 grant, for those buying existing properties.
Today, their cousins at the Real Estate Institute of Victoria (REIV) have joined the fold, claiming that the cancellation of FHOGs on pre-existing dwellings contravenes the inter-governmental agreement (IGA) on the reform of Commonwealth/States financial relations, and demanding their reinstatement:
Recent changes to the first-home owner grant in all states and territories (except for Western Australia and the Northern Territory) have added to the uncertainty and impacted on the activity of first-home buyers in the market.
As part of the inter-governmental agreement (IGA) on the reform of Commonwealth/States financial relations signed in June 1999, all states and territories agreed to provide uniform financial assistance to Australians who are buying their new or established first-home through the introduction of the first-home Owner Grant.
According to the recently released QBE Lenders’ Mortgage Insurance’s (QBE LMI) 2013 Mortgage Barometer Report, 84% of first-home buyers believe property prices are close to reaching or are above what they can afford and 69% worry they will neverbe able to afford their own home (compared to 24% of all respondents).
Unfortunately, governments of most states and territories have made it much harder for first-home buyers to see their dreams realised…
As a result of the new policies, the Australian Bureau of Statistics’ figures for March 2013 show that first-home buyers are becoming an endangered species…
REIA has been lobbying hard against the breach of the IGA, however we are still to hear what the Commonwealth will do.
If the Real Estate Institutes were truly concerned about the plight of FHBs, they would lobby for an end to negative gearing and a relaxation of planning and other supply-side constraints that prevents the supply of affordable housing. Instead, here they are once again lobbying the Federal Government to continue a policy that is unambiguously inflationary for house prices and self-defeating for FHB affordability.
I just hope all levels of government have the cojones to reject the property industry’s pleas for further taxpayer support. They have fed from the taxpayer’s teat long enough.
Always bet on self-interest…
