What scrapping W.A. first home owner grant will do to property

The Perth property market is languishing and despite this, the Western Australian budget has dealt a blow to first home buyers, who will no longer receive a government grant for established housing.

This would bring Western Australia into line with all other Australian states.

Treasurer Mike Nahan said the move was a result of the state government’s desire to focus financial support on residential construction.

He said:

“The $3,000 first home owner grant for established homes will be removed following passage of the required legislative amendments,”

“Importantly, there are no changes to the $10,000 first home owner grant for new homes or to the generous transfer duty concessions for first home buyers of both new and established homes,”

This comes at a time when the number of first time buyers are higher in WA than in any other State:

WA first home buyers2

Source: Dr. Andrew Wilson, Domain.

But it’s also a time when the number of buyers in W.A. is dropping significantly:

WA first home buyers3

Source: Dr. Andrew Wilson, Domain.

Real Estate Institute of Western Australia president David Airey said the government’s logic was flawed, because the oversupplied Perth market doesn’t need more homes.

“Supply is not the issue in WA, affordability is the issue, and making it harder for first home buyers attracted to existing stock makes no sense,”

“By aiming the first home owner grant to new constructions only, first home buyers who want more affordable, established homes in older suburbs are being disadvantaged.”

Mr Airey said this would create an imbalance in the housing market and add to urban sprawl.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au

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