The Real Estate Institute of Australia used its pre-Budget submission to call for reform to the grant system to help solve the “acute” problem of affordability for new buyers.
First home buyers are finding it increasingly hard to enter the market, with their share of property purchases at a historic low, according to the submission.
“Research reports are showing that aspiring home buyers are saving for longer and are over-reaching themselves in order to enter the property market, with many turning to non-saving-based sources in order to raise a deposit for their first home,” it said.
The submission called on the federal government to implement policies that would help aspiring first home buyers.
“Such assistance should be uniform and should not discriminate between buyers of new or established housing,” it said.
First home owner grants are restricted to the purchase of new dwellings in all states and territories except for Western Australia.
The submission pointed to statistics showing that first home buyers with a mortgage opt for new homes only 18.6 per cent of the time.
It also noted that sales of established homes to first home buyers often lead to purchases of new housing by the sellers.
“In these examples, the multiplier and employment effects are probably greater than when a first home buyer purchases a new house, as the size and cost of construction of dwellings purchased by upgraders is generally more than that of first home buyers,” the submission said.
“Furthermore, first home buyers of lower-valued established homes usually embark on a program of home improvement and renovation, providing a stimulus to the building sector.”