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WA $3000 FHOG for established homes axed

Discussion in 'Property Market Economics' started by JohnPropChat, 7th Oct, 2015.

  1. JohnPropChat

    JohnPropChat Well-Known Member

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    More blows to Perth market:
    http://reiwa.com.au/about-us/news/$3,000-fhog-for-established-homes-officially-axed/

    First home buyers who purchase an established home in WA will no longer receive the $3,000 First Home Owner Grant (FHOG), following its official abolishment last Saturday.

    As part of the 2015-16 WA State Budget, the State Government opted to scrap the $3,000 FHOG for established homes completely, but retain the $10,000 grant for new builds.

    REIWA Deputy President Hayden Groves said the Institute maintained its disappointment with this decision.

    “By removing the grant for established homes, first home buyers who want to purchase an established home in an older suburb are now disadvantaged. This skew towards new builds is creating an imbalance in the housing market and pushing a lot of first home buyers to the urban fringes, which actually works against the Government’s own urban infill policy,” Mr Groves said.

    Mr Groves said that although this was disappointing news for first home buyers, WA’s current property market presented great opportunities for those looking to purchase their first home.

    “With record low interest rates and property listing numbers the highest they’ve been since 2011, now is a great time for WA first home buyers to enter the property market – and if they purchase a home for $530,000 or less, they may still be eligible for the First Home Owner Rate of Duty,” Mr Groves said.
     
    2FAST4U and Be Developer like this.
  2. Ed Barton

    Ed Barton Well-Known Member

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  3. JohnPropChat

    JohnPropChat Well-Known Member

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    How so?
     
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Grants for established homes only ever had the effect of increasing the price of those established homes buy the amount of the grant.

    The money would be better spent going towards the building of new homes, IMO (and the government's opinion).

    Yes, the downside is that FHBs will be out in the fringes in new estates - but that's been the case for a very long time. The FHBs who can afford to, can still buy established property but without the benefit of a government handout.
     
  5. JohnPropChat

    JohnPropChat Well-Known Member

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    Likewise, the $10k grant is already factored into land sales in new estates. I don't think we have to worry about new stock with so many apartments coming online in the next few years.
     
  6. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    NSW (more specifically, Sydney) is still under-building according to the stats.
     
  7. Ed Barton

    Ed Barton Well-Known Member

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    Government's should not be handing vendors money for nothing.
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    It can be argued that the grant increases the price by significantly more than the amount of the grant itself.

    The biggest limitation for new home buyers is consistently the deposit, not affordability. Having an extra $3,000 can be leveraged to 90%, thus it becomes the potential deposit for another $27,000 in lending, thus pushing up the price of a property by $30,000.

    In many locations the various grants are almost useless anyway. The biggest boon to FHBs in Victoria is the 50% reduction in stamp duty, if the property is worth less than $600,000. Unfortunately you don't get much in metro Melbourne below $600k. Most of the FHBs I see these days aren't getting any benefit from the government grants at all.

    This change for WA simply brings them in line with what most other states are already offering.
     
  9. weejimmy

    weejimmy Well-Known Member

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    You can still claim stamp duty if the house is sub $530k
    And $2000 home buyers assistance account grant.

    Just means more slums of the future being built.
    I think these massive "planed communities " are a bad idea. A whole lot of the cheapest houses available in one place sounds like a bad idea to me.
     
  10. 2FAST4U

    2FAST4U Well-Known Member

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    $3000 is barely anything anyway. Besides saving the Government some cash it's not going to have an impact
     
  11. weejimmy

    weejimmy Well-Known Member

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    The $3000 could be used as part of the deposit so can be as much as 25%.
    That's a lot realy.
     
  12. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    If you have an infill development product that is going to sell under $700k or so then marketing it during construction to FHOG eligible people can be a winner. They would get the $10k grant plus the stamp duty savings (only applicable on land value I think under construction?)
     
  13. JohnPropChat

    JohnPropChat Well-Known Member

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    If they buy the end product then they are up for stamp duty as the upper limit for concession is $530k.
     
  14. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Agreed, if they buy the end product the are above the stamp duty limit but I thought, and i could be wrong that, if they bought during construction a la OTP that they only had to pay stamp duty on the land. @MTR was this the case with your OTP sales?
     
  15. JohnPropChat

    JohnPropChat Well-Known Member

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    I remember reading that Victoria has stamp duty concessions for OTP. Didn't realize WA has them too. Hope not, one more reason for developers to unload more apartments into the market.
     
  16. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I'm not definite on it as I've never looked into it myself or done it, just something that has stuck in my brain from somewhere.
     
  17. WestOz

    WestOz Well-Known Member

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    We were discussing this a few months ago in Perthguys rental prices thread.
    Pensioners are unloading established to get under new asset tests, ex-fifo that have gone back east etc have their places on the market.
    New home buyers that have decent income will either decide to cop the 3k etc loss and buy close to family, established conveniences etc, Or go out to Byford, Armadale or up Yanchep way etc.
     
  18. lightbulbmoment

    lightbulbmoment Well-Known Member

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    Just like the government shouldnt be taking money off fhbs for nothing in the form of stamp duty.

    Its a jk a they go on about saving a deposit then they take it off you fhb should pay no stamps.
    whats 3k anyway thats also a jk
     
  19. MTR

    MTR Well-Known Member Premium Member

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    Depends at what stage they buy during the build, I have had 2 sales and the sale at frame work will cost the buyer more than buyer 1 at slab
     
  20. weejimmy

    weejimmy Well-Known Member

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    There's stamp duty concessions for new build and established in WA.
    As in there's no stamp to pay for a FHB. If the house is under $530k.