The Queensland government has increased its First Home Owner Grant, calling it a “cost of living boost”.
The scheme has increased to $30,000, up from $15,000, with the state government predicting it will offer 12,000 first-time home buyers the grant by June 2025 when the offer expires.
The increase brings Queensland in line with Tasmania, which also offers $30,000 in a similar scheme. Other states including New South Wales and Victoria offer $10,000.
The grant covers modular and prefabricated homes, granny flats built on a relative’s land, or a home in a manufactured home park.
However, the First Home Owner Grant only covers new houses, units and townhouses, regardless of whether buyers are acquiring off-the-plan homes or building themselves.
Existing properties are not eligible, and the grant is only available for properties and land valued at less than $750,000.
The scheme has faced criticism given that construction costs have increased by an estimated 30 per cent in the wake of the pandemic.
In figures from April 2022, the Australian Bureau of Statistics suggested that, on average, building a home cost around $473,000, although this can deviate between states.
This year, estimates put the median settlement value for residential land in South-East Queensland at between $248,295 and $345,000.
Average completion times for houses in Queensland vary between six months and two weeks, and seven months and two weeks, meaning many first-time buyers will have to pay rent on top of the land and build costs for a period of time.
According to figures released by the ABS in June this year, new private sector house commencements fell 6.6 per cent to 25,162 homes from the previous quarter.
However, Oliver Hume Queensland general manager Dan Ross said the upsized grant would make it easier for first home buyers to get on the property ladder.
“This is a great move by the government,” he said.
“First home buyers feel the pressure of interest rates and cost of living pressures more than anyone else and can really use a little extra support to make their home ownership dreams come true.”
But the Real Estate Institute of Queensland has questioned the move with chief operating officer Dean Milton saying that while the REIQ welcomed the intent to encourage more Queenslanders to achieve home ownership, it would have preferred to see supply tackled head on.
“We’re facing some significant challenges in the real estate and housing sector at the moment that can’t be solved by providing a cash boost to some buyers,” Milton said.
“We’ve seen in recent times, especially in response to Covid, an array of new grants at both a federal and state level.
“While that’s great in theory from construction perspective, it’s brought forward high demand and put pressure on the cost of building supplies and the ability to access tradespeople.
“We generally support initiatives that give first home buyers a leg-up towards home ownership, however, at a time when the RBA is doing its best to tame inflation, we question whether now is the right time for more demand-side stimulus.
“Builders in Queensland are already facing the highest construction costs in the country and we would expect this measure to drive up those costs further.
“The REIQ would like to see the government take on supply-side issues such as land release, the planning approval process, appropriate skills pipeline, or freeing up excess bedrooms from retirees.
“We would prefer the one-off windfall from increased coal royalties to support stamp duty and land tax reform or easing deposit obstacles, rather than sugar hits.”