State budget delivers relief for first home buyers

By DIONE HODGSON

First home buyers say they have been dealt some welcome relief with the extension of the First Home Bonus Grant.

The announcement came as part of last month’s State Budget, and will see the $8000 grant extended until at least 2013, at a cost of $5.6 million.

This was a backflip from the 2011/12 Budget, where the Government announced it would halve the bonus this July, before phasing it out completely in 2013.

South Australian Treasurer Jack Snelling said the decision was made because the Government was facing a large drop in revenue brought on by a soft property market.

“To address that the Government needed to bring in measures to get South Australians building more houses and entering the property market,” he said in a statement.

“More activity in the building and construction industry will also mean more jobs for South Australians.”

Combined with the Federal Government’s First Home Owners Grant of $7000, first homebuyers who build or purchase a newly constructed home can receive up to $15,000 towards their first home.

For young people attempting to enter the property market, the bonus provides some relief and stabilisation during the building process.

Alex Bubner, 21, who recently purchased his first home at Blake’s Crossing, 30km north of Adelaide, says he is happy the government chose to keep the bonus in place.

“I wanted to be able to afford the house without the bonus, but it did make things easier, especially with unexpected costs,” he said.

“The grant may not seem like much compared to the cost of a house, but it can pay for the entirety of flooring or fencing, so it’s a big help.

“With the economy in it’s present state, it’s hard to afford a house, and taking the bonus away may discourage other buyers and the real estate industry will be hit hard because of it.”

Carly Grose, 20, who is currently considering entering the property market with her partner, said the extension of the grant would encourage her to enter the market sooner.

“For my first home I think it would be smart to take that from the Government, I mean that’s an extra $8000 off your house just for building.”

“It’s a massive incentive to buy and build younger, it makes me want to buy now instead of later.”

Not all parties involved are happy with the announcement, with the State Opposition sceptical as to whether it will make a substantial difference to property development.

Shadow Treasurer Iain Evans said the Government was sending mixed messages to South Australians.

“The real problem with the announcement is that the Government really has no strategy for the housing industry at all,” he said.“The economic advice from around Australia appears to be that all it does is drag forward demand so you create a hollow in the next year or the year after.

“The problem for South Australia is that it’s confidence is way down and people aren’t investing in South Australia, and with the high level of taxation I’m not sure this grant will necessarily deliver the result the Government wants.”

As to whether the Liberal Party would scrap the bonus if elected, Mr Evans said it would be dependent on the state of the economy at the time.

“The decision will come when we get to the election and we know what debt we’re looking at and what the level of budget deficit is,” he said.