The upcoming termination of the First Home Owner Grant (FHOG) in South Australia has prompted a last-minute flood of buying activity to beat the impending deadline, according to Raine&Horne.
The FHOG of $5,000 for established homes is to be axed in South Australia on 30 June 2014.
Raine&Horne Salisbury principal Andrew Harvey reports that first home buyer numbers are about 50 per cent stronger than three months ago, with the end of the grant contributing to increased activity.
“In our market, which is about 25 minutes by car north of the Adelaide CBD, demand for properties priced below $340,000 is hot as buyers rush to beat the June 30 deadline,” said Mr Harvey.
“First-time buyers in the Elizabeth region, where it’s possible to buy an entry-level three-bedroom home from $200,000, will be very much disadvantaged by the expiration of the $5,000 grant for established homes,” he added.
In another commuter suburb, Morphett Vale, to the south of Adelaide, Raine&Horne Morphett Vale co-principal Jen Drabic agreed the end of the grant is attracting first-time buyers to her market.
“We’re definitely seeing a pick-up in first home buyers and there is a level of anxiety to buy properties,” said Ms Drabic, who reports a 30 per cent jump in first-time buyer activity in recent months.
Raine&Horne South Australia chief executive Michael McDonald said the end of the FHOG will tip the scales increasingly in favour of investors.
“We were hoping that with the change of government in South Australia at the end of last year, there would be a stay of execution for the FHB grants,” he said.
“Sadly this hasn’t happened, and the situation from 1 July will be much harder for first timers, as has been the case when similar cuts to grants were imposed in the eastern seaboard states a few years ago.”