First home buyer boost in ACT
The ACT’s First Home Buyer (FHB) Grant will be boosted to $12,500 at the end of August.
However, in a change to the initiative’s regulations, the grant will be restricted to eligible applicants buying new homes.
The shift in criteria follows the lead of many other states, which have used the grant as a means to stimulate the construction sector.
The new, increased FHB grant will replace the current $7,000 offering for homes.
The August 31 deadline has prompted a “flurry” of FHB home loan applications, mostly for existing homes closer to the city since the changes were announced in early June, according to Paul O’Regan, head of LJ Hooker Home Loans.
Mr O’Regan estimated about 35 per cent of home loan applications are now from first home buyers, ‘significantly more so than previous quarters’.
“First home buyers traditionally make up less than a quarter of the market,’’ he said.
Mr O’Regan also expects some first home buyers will stay at home longer, delaying their purchases as they save up a bigger deposit or seek assistance from their parents.
And he expects the trend of first home buyers becoming ‘renter-investors’ – those who rent but forgo the first home buyer grants by buying an investment property – to rise.
“For first home buyers that buy an investment property, they get the rental income plus their own wages,” he says adding that they could also cut their tax bills by negative gearing.
Frank Pompeani, principal at LJ Hooker Tuggeranong has noticed a ‘slight upwards trend’ in first-home buyers.
“First home buyers have recognised there is good value to be found in the established market,” he says.
“It’s a nice injection prior to the election, but neither first home buyers nor sellers should panic, the value will be there.”