Gold Coast launches FHB triple pass (Updated)

Update: I was a little too quick on my judgement of the GCCC. It seems that this triple pass has actually been voted down 8-7 in this afternoon’s session. This may have been because on further inspection the new grant would have made the applicants ineligible for the latest state government grant. Either way the Mayor seems disappointed with the outcome. (h/t to AlexF for the update)

The Queensland treasurer in his wisdom has asked the council to reconsider its vote.


Like a boxer that doesn’t know when to stay on the canvas the Gold Coast city council is yet again trying to fire the engine of the politico-housing complex.

From today new buyers and builders can snap up a `triple dip’ of $25,000 in property grants as the Gold Coast prepares to become the most subsidised housing market in Australia.

Today the Gold Coast City Council will vote on incentive plan to give $5000 to new builders and $8000 to first-home buyers purchasing a newly-built property.

If approved this afternoon, first home buyers can pocket the payout on top of the State Government’s existing $7000 First Home Owners grant and the new $10,000 Building Boost which rolls out today for properties under $600,000.

The catch is that the offer is only good for six months — until January 31, 2012.

The building industry has welcomed the temporary `triple dip’ but not everyone is smiling.

The burden of funding the multi-million incentive plan will hit repeat buyers from today when stamp duty discounts are scrapped to pay for the scheme.

Non-first home buyers have been warned they could pay up to 30 per cent more in transfer duties, regardless of whether the property is owner-occupied or an investment.

The focus on stimulating entry level market also means no help is being offered to the city’s ailing luxury market which has been hammered by record price drops on multi-million properties.

Given that a potential new home builder could already get a first home buyers grant from the Federal government along with a new boost from the Queensland government, any rational person would have thought that this extra layer of stimulus was in response to a massive undersupply issue in the Gold Coast area.  But who is rational these days ?

I do, however, have to thank the Gold Coast city council for providing a new litmus test to judge the public’s response to more stimulus for housing. Will we see a new response ? Or, is the patient dead on arrival? I will be watching.

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Comments

  1. This is interesting:

    “However, further investigation has shown that Gold Coast applicants might be excluded from being eligible for the State Government grant,” Cr Clarke said.

    Any ideas why GC applicants would be ineligible for the State Government grant? I presume this is the building one Cr Clarke is referring to.

  2. 25 grand isn’t much considering most properties up there are virtually unsaleable yet they’re still building more amd more new ones. That place is truly Australia’s Florida by any other name.

  3. I suppose they are trying to send prices up for new buyers. Just another try to match Rudd’s First Home Vendor Boost.

  4. It’s a pitty that the whole thing hasn’t worked out. If they were enough takers it would divert demand from the existing stock and further crash QLD housing market making dwellings more affordable. I suppose that it would be contrary to the legislators’ intentions but one thing that you can always count on with governements are unintended consequences.

  5. =( sad day, lets just hope states dont follow as they bow into bogan pressure that “if queenslanders get it, why cant we get it” mentality.

  6. I agree this is an important litmus test for housing stimulus bribes…

    I think fooling people twice will be much harder.

    The sheeple were fooled into thinking the GFC was behind us and that housing only ever goes up…they now know that these are falsehoods and wont fall for this crap anymore…well most wont, I hope : /

  7. +1 JPK.

    GCCC trying to meddle with normal cycles – trying to prop up construction to keep/create jobs but in the course would devalue existing stock and rate payers/investors!!

        • … And don’t forget our shiny new police helicopter, just incase someone does the bolt from an RBT.

          Gold Coast is up the creek with no paddle. It’s a shame, cos the weather’s so nice here in Winter.

  8. When will they realise that the next wave of fhb’s are still in highschool and they can’t induce that demand to prop up prices anymore? We will suffer for at least another 12mths because of the rudd stimulus before fhb numbers return to normal.

    • Are you saying that in 12 months the current crop of year 12 sudents are going to be buying houses? This is a p*sstake surely (?).

      What are they buying with, bottle tops?

    • I’m serious about the fact that we’ve pulled out every fhb sucker into the
      game and the next crop needs time to grow up which is still 12mths away. After the induced fhb numbers in 2001 it took 3 years for the numbers to return to normal from 3 years of few fhb’s. This time it was a bigger number induced too. Interestingly the numbers will still be low when the terrible 2009 vintage hits peak default…

      • Really? My son is a highly intelligent Commerce student at a G8 uni (the types the investment banks snap up) and he “wont touch property with a ******* pole” (his comment minus other invective).

        The words out!

        • Really! So that argument that someone at a G8 University that the “Investment Banks” all want to snap up is convincing? Leave the words investment bank & snap up out & I might be convinced. I don’t think Investment Banks snapping anything up is such a great thing. They are more or less taxpayer funded now & what were they thinking with there dodgy products leading into GFC?

          • Take your bitterness up with someone who cares.

            My point was that someone studying finance (with some RE development component) doesn’t consider RE a priority or a good buy right know.

            SOOL, you think we should import our finance professionals like our doctors. Maybe unis should just teach hole digging and ignorance.

            BTW Tertiary should be totally free IMO.

        • I probably should let this go as a dead thread, but I think my point has been misunderstood.

          Over time there are only a limited number of people that fit the FHB category being of a certain age and income. The ABS stats show over time that the numbers of FHBs are fairly stable rising from about 115 000 p.a. in the early 2000s to about 125 000 in the late 2000s. When FHB grants are given it induces future FHBs to buy earlier and then the numbers drop off over the next 3 years until the average of the 4 year period is equalised at the long term average. Given the 2009 FHBs were nearly 50% above average and 2010 was about 25% below average, we will see FHB numbers below average for another 12months at least. That is what my comment about them being in Year 12 referred to, that we have to wait until the next potential FHBs are of the necessary age and income.

          With respect to your son (and myself) not everyone of a certain age and income are suckers who will get into the market at the moment, however there have still been a lot of them out there as a number of my friends have bought recently even those employed in jobs that expose them to the reality of the housing market as it is. I am yet to be convinced that people have en masse given up on property yet, it is a growing sentiment, but not one that has permeated the wider community.

          So my point is that local/state/federal governments cannot prop up housing with FHBs as it is too recently after the last FHB boost and there is no supply of potential FHBs left.

          You may also find it interesting that I have found that the number of FHBs buying is a lead indicator (by about 6 mths) on house prices. So given the FHB numbers must stay subdued for another 6-12mths we most likely have another 12-18mths of house price falls due to subdued FHB activity alone. This is why the 2009 vintage of defaults peaking in 2012 is so interesting.

          • Its called Household formation, but I will be worried that the first thing that comes to the mind of a uni passout is a house. The next set of FHBs are not in Unis they are probably five years into their careers.