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28 November 2023
In a proactive response to the declining home ownership rates among young Queenslanders, the Queensland government has announced a substantial doubling of the First Home Owner Grant. With the grant now standing at $30,000, the aim is to empower aspiring homeowners and facilitate entry into the property market amidst soaring home values and cost-of-living pressures.
This augmented grant seeks to alleviate the challenge of accumulating a deposit for a first home. However, its effectiveness in aiding prospective homeowners is being scrutinised against a backdrop of broader market dynamics and pressing housing needs.
Economists caution that historical patterns suggest these incentives may inflate housing prices without significantly boosting home ownership rates. This concern persists despite the eligibility criteria being tailored to encourage entry into the property market, encompassing new home builds or purchases valued up to $750,000, including units, townhouses, and even granny flats, albeit within specific constraints.
Moreover, the Real Estate Institute of Queensland (REIQ) highlights a critical shortage of homes in the southeast corner, emphasising the pressing need for more than 40,000 additional homes built annually. This shortage, coupled with the Queensland government’s ambitious target to construct 900,000 new homes in the southeast corner by 2046, underscores the magnitude of the housing challenge facing the region.
While the grant’s intent is to bolster home ownership, concerns linger regarding its potential impact on housing prices. The REIQ warns that this initiative might strain the availability of building supplies and skilled tradespeople, exacerbating the challenge of meeting the significant demand for housing.
Despite recent signs of a temporary slowdown in new dwelling approvals, there’s uncertainty about the long-term trajectory of construction costs. CoreLogic’s observations indicate a gradual increase in construction expenses over time, adding to the complexity of the housing landscape.
As the debate intensifies, experts weigh the grant’s effects against broader economic realities. While the injection of additional revenue from increased coal royalties is cited as the impetus behind the grant’s augmentation, questions remain about its capacity to address the root cause of declining home ownership rates among Queensland’s younger demographic.
Ultimately, as the grant takes effect, its true impact will unfold against the backdrop of critical housing shortages and ambitious government targets. How it aligns with the larger goals of addressing housing needs and fostering accessibility in Queensland will undoubtedly shape the future property landscape of the region.