The Unconditional Blog

The impartial voice of the industry


Australian housing market boosted by incentive scheme

Posted on: September 19th, 2009 | Filed in Buying / Selling a home, International

australian-homes-for-saleAustralian homebuyers – specifically first time home buyers have leapt on the incentive to get into their first home.

In the 10 months to the end of July more than 137,000 houses were purchased aided by the combintaion of both state and feral support with an incentive of between A$14,000 and A$21,000 – that would equate to a Federal funding of in excess of A$2.4bn.

There is no doubt that this incentive has underpinned the property market on the other side of the Tasman where sales were reported last week as being up 32% in a year. The June quarter saw 130,000 sales.

What is really interesting is the Australian perspective on this bouyant property market stimulated by this government stimulus package – this is the quote from the Housing Minister Tanya Plibersek:

“A strong housing market is critical for underpinning confidence and supporting jobs in the Australian economy as we battle the worst global recession in 75 years.”

A somewhat different perspective from that expressed by the Reserve Bank Governor here in NZ.

Article Discussion

  1. So, essentially, a scary number of first home buyers probably have no equity in their new homes at all, other than what they’ve been handed on a silver platter. Price fixing (Government meddling in the market) frought with danger. Good for votes though I spose.

  2. To be fair this incentive has in one shape or another been around for over 15 years. In light of the recent downturn the Federal Govt have placed that boost you mention, meaning that for a first time buyer of a brand new home they can get the max. AUD$21k. Kiwi’s aren’t missing out though, see this

  3. David

    Thanks for highlighting this fact – the Australian tax system (as with most countries tax systems) cannot be directly compared. What the Australian tax department hands out with one hand, they tend to claw back with another. I am of the opinion that the best system is simpler, clearer and transparent tax systems of which NZ has a good example (not perfect).

    As to the statement that “kiwi’s aren’t missing out – I think that could be misinterpreted. The point is that kiwi’s permanently residing in Australia can get the grant as can Somalians who are resident and a citizen as can Brits – 4.2 million kiwis cannot get the grant – and nor should they – they pay tax here and benefit from of the NZ tax benefits, LAQC, no-CGT etc.

  4. Alistair
    As you correctly note its only permanent residents in Aust living under Special Category Visas that qualify. Should change my wording to “some Kiwis aren’t missing…”
    Still didn’t stop the Sunday Mail in SA stirring up plenty of comments with their recent article about this subject

  5. Greig Metcalfe says:

    Great idea by our Assie friends. The ability for New Zealanders to own a home in the low income first home sector should be boosted by a similar inititive in NZ.

    Why not have the low income ‘deserving’ in a modest home of there own as opposed to forcing them to rent from the subsidised landlord rental industry.

  6. Wouldn’t a “first business owner’s grant” be better for NZ? When I bought my first home, I saved the deposit. Now there’s a novel idea it seems! Obviously I don’t quite understand this “handout” mentality.

    The quote above says: “A strong housing market is critical for underpinning confidence etc” – essentially the Govt has bailed the market out and artificially inflated it so that people are lulled into a false sense of confidence. Goal achieved I guess. But at what cost?

  7. Most of the Oz first home buyers grant is eaten up by stamp duty which we do not have here.

    NZ Welcome Home Loans scheme has up until May 2009 provided borrowers with NZ$719 million in finance for 4,482 loans.

    The Welcome Home Loans scheme was set up by the government at the start of New Zealand’s housing boom in 2003 as a vehicle allowing prospective first home buyers on lower incomes to access finance to buy a home.

    Ar present a borrower is able to borrow up to NZ$200,000 with no deposit and then up to NZ$280,000 with a 15% deposit on the amount over NZ$200,000. However, from November, the cap on the amount able to be borrowed will be raised to NZ$350,000.

    So NZ has already had a form of home buyers assistance well before the Oz version. In addition it is now possible for state house tenants to buy the home they are living in.

    Steve – that’s a brilliant idea “first business owners grant” but shouldn’t the banks be doing that – oh that’s right they always want real estate as security!

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