Governments abandoning majority of first homebuyers: REIA

by AB28 May 2013

More first home buyers will be left out in the cold as state governments ignore a promise made over a decade ago, according to the Real Estate Institute of Australia (REIA), following the announcement by the Tasmanian Government to end the $7,000 First Home Buyer Grant in that state.

REIA claims that, in 2000, an Intergovernmental Agreement (IGA) was made that states’ assistance to first home buyers would be ‘uniform’ and that ‘an eligible home will be new or established’.

The group’s president, Peter Bushby says the governments of Queensland, New South Wales, South Australia, Victoria and now Tasmania have either ceased providing assistance to first home buyers purchasing established housing, or have indicated that they will be ceasing to do so by July 2014.

“Not only is this in breach of the IGA on Federal Financial Relations, but it also ignores the evidence that 80% of first home buyers have a clear preference for established housing.”

Bushby says REIA has been lobbying hard against this ‘breach’ of the IGA, but is waiting to hear what the Commonwealth will do.

“The impact of the decisions by the state governments is clear in the plummeting number of first home buyers. Despite cuts in the official interest rate by the RBA to levels not seen for decades, the proportion of first home buyers decreased to 14.2% in March 2013.”

“The socio-economic demographic of most first home buyers shows a clear preference to living close to existing facilities and work as opposed to buying in new housing estates. Lifestyle, environmental impact and proximity to public transport all play a part and that’s why 80% of first home buyers choose established dwellings.”