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The application of the first home owners grant to new homes only is distorting Western Australia’s property market and the $15,000 concession should be expanded to include established homes, an industry commentator says.
Professionals says the new Labor state government should boost the market by making the first home owners grant available to those buying established homes.
CEO Shane Kempton said the first home owners grant has resulted in the prices of established homes in newer suburbs falling.
“[This is] because established property owners in these areas have had to discount their selling price to match the $15,000 FHOG that applies to new homes,” Mr Kempton said.
“The Labor Party received huge number of votes in these newer outlying suburbs of Perth in the state election and they should reward property owners in these areas by extending the FHOG to established homes.”
Mr Kempton said extending the grant would make good financial sense.
“Because when more first home buyers purchase established properties, the owners of these properties can upgrade to newer established homes, generating additional stamp duty.”
He said many newer established property owners are gridlocked in the property market, stymied by potential buyers preferring to build new homes because of current FHOG regulations.
“The only way they can sell their property is to reduce the selling price of their home which could be difficult because they could be in a negative equity situation due to Perth’s falling property values.
“By increasing the $15,000 FHOG to established homes, it will give a major kickstart to the Perth property market and this, in turn, will help the rest of the economy as consumer confidence will begin to rise.”
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