Wednesday, 15 October 2008
Questions without Notice
I want to thank the member for Forde for that question. When I was in the electorate of Forde recently with him he took me to a number of new developments. It is a very fast-growing part of south-east Queensland and of course it has all of the challenges that fast growth brings with it, but the member for Forde is very well connected with his local government up there and with his local developers and together they are making a great effort to manage the fast pace of growth.
Yesterday, the Treasurer and the Prime Minister announced a major measure to improve confidence in the housing market: the doubling of the first home owners grant from $7,000 to $14,000 on existing homes and the tripling of the grant from $7,000 to $21,000 for new homes. This measure will provide a much-needed confidence boost, both to the housing industry and to the economy as a whole. It will stimulate much-needed new building across the housing sector. In fact, the HIA have estimated that we will see an extra 15,000 homes built because of this measure. It will certainly allow people who were considering buying a home to bring forward that purchase. People who are buying existing homes might just have a couple of thousand dollars left at the end of the day to buy the new refrigerator they might need when they are moving into their new home, particularly if they are moving out after living with their parents, for example.
This investment, of course, has a multiplier effect across the whole of the economy. That is why it is such an important part of our economic security package and has been so strongly supported by the industry. I spoke yesterday about the endorsements of the Housing Industry Association, the Residential Development Council and the Master Builders Association. Today I would like to tell you of some of the comments that have been made by Noel Dyett of the Real Estate Institute of Australia. He says:
This decision, combined with last week’s reduction in interest rates, should provide a much needed impetus to first home buyers who have been waiting to enter the housing market.
That was a terrific comment from the Real Estate Institute.
Paul Lahiff, who is the managing director of Mortgage Choice, who I met with last week, said that it is a ‘bold and positive move by the government that will improve the sentiment throughout the entire property sector’. Joe Falanga, the sales manager of Lily Homes, was quoted in today’s Sydney Morning Herald as saying:
… once you start talking about $21,000 it’s different. Within a few hours we got calls.
The most significant response and feedback that we have had about this new measure has been from the many people who have been ringing my office and the state treasuries wanting to know about how to access these new benefits. The first thing to say to those people who are considering entering the housing market now is to contact their state treasuries in the normal way that they would if they were getting the first home owners grant. I know that our Treasurer has already written to his state colleagues to request their urgent implementation of this new measure.
The eligibility requirements for the new benefit are the same as for the first home owners grant: you must be over 18 years old, neither you nor your partner can have owned a property previously, you have to live in the home as your principal place of residence for six out of the first 12 months of owning the place after settlement and you have to sign a contract for the new home between 14 October—yesterday—and 30 June. This new measure is a time limited measure. It ends at the end of this financial year—30 June 2009.
This measure will make an enormous and real difference to young Australians who have been waiting to get into the housing market. Saving a deposit has been one of the biggest barriers to entering the housing market for some time now, and this measure makes that entry into the housing market just a little bit easier. There was a young couple from Altona who were reported in the Herald Sun today as saying this ‘will make a huge difference. It will probably cover all our stamp duty and leave a little left over for appliances and furniture’. The young couple featured in today’s Herald, due to be married in January, said, ‘What a relief; we might be able to crack a place we like.’
I am not sure that this is within my portfolio responsibilities, but I am happy to answer the question. It is a very good question. The government has decided to act with respect to the Economic Security Strategy because there are very strong downward pressures being exerted on the Australian economy by the international financial crisis. Those downward pressures, as was indeed noted by the leader of the member for North Sydney, the Leader of the Opposition, are already having a significant effect on the economy, and the housing sector, of course, is an important part of that. I do not make any projection about the specific effect that the first home owners grant increase will have. That will be very difficult to determine and to extract from the wider economic data, but it is part of an overall strategy which is designed to sustain economic activity, in that case in a specific sector that is crucial to the wider Australian economy. It is designed to push back, by stimulating spending and by stimulating economic activity, against those very powerful downward pressures that are being exerted by the global financial crisis on the Australian economy.