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As part of the $10.4 billion economic stimulus package unveiled on 14th October the government has tripled the First Home Owners Grant to $21,000 for new homes and doubled it to $14,000 for existing homes. This is expected to provide a much needed boost to the housing industry and make it easier for first home buyers to enter the market.
With housing affordability at an all time low and the cost of general living increasing significantly over the last few years, many first home buyers have found it difficult to save the necessary deposit to purchase a home. The Government’s boost to the First Home Owners Grant (FHOG) will alleviate some of this pain. A young couple looking to buy their first home in suburban Brisbane for around $400,000 would need about $32,000 in savings to settle a loan with most of the major banks. This would cover a 5% deposit, lenders mortgage insurance, legal fees, application fees and mortgage registration fees. This is a considerable amount for first home buyers to save and the boost to the FHOG will make this easier. Warwick Temby, the executive director for Queensland of the Housing Industry Association (HIA) expects the boosted grant to result in an additional 15,000 homes being built over the next year. Mr Temby said "Home buyers have been doing it tough for the past few months and we think it's a great initiative and it'll turn into some new housing activity very quickly." Many analysts are expecting interest rates to continue downward before the end of the year. This combined with the boosted FHOG could provide excellent opportunity for first home buyers. |
