Jordan King Lacroix

The first home buyer’s grant is a myth, don’t rely on it

With prices falling, the idea of a home of our own seems doable. Disappointingly the help available doesn’t help. 

 

 

I, like many other young newlyweds, am looking for a home to call my own.

Young Australians of my generation are unlucky in this respect, given housing prices in this country – especially where I live, in Sydney – have been prohibitively expensive for a long time, as everyone knows – especially those without rich parents or a gaudy salary.

But housing prices have started to fall, in some areas by as much as 18.8%, which means that – at least for the moment – it’s a buyer’s market for people with more affordable budgets. Those who are putting together their more meagre savings to find a reasonable place to live in an area that’s close enough to work, friends and public transport, are also secure in the knowledge that the First Home Buyer’s Grant is there to support them on their journey to homeownership.

Except that, of course, it isn’t.

You see, what isn’t clear about the First Home Buyer’s Grant plan, is that you only get the additional lump sum of $10,000 to spend on your home if you’re buying a new home, not an existing home.

Yes, the plan does eliminate stamp duty on existing homes up to $650,000, a welcome relief to people entering the lower-level market. What’s annoying about this, however, is that it is mostly existing properties that are more accessible, while the newer properties are either much smaller, or in areas that are undesirable, or both.


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Isn’t the whole point of the scheme to help young people get into the home buyer’s market? Otherwise, what’s the point?

All it will do is artificially lower the value of the existing homes so that the government can buy them up, demolish them and build new apartment blocks on the land. Gentrification is the key, not the establishment of new suburbs. There’s a reason why the suburbs of this city are dying.

Why block out those who want to buy existing homes? Why do they not deserve a helping hand to enter the market on a property that’s of the same value to one that’s new? I understand giving a bonus to maybe those who are building new homes, something else which is covered under the scheme, but why do people only buying new homes deserve special treatment, compared to those shopping for what’s already there?

This will force many people to look to buying off-plan apartments in new developments because they know they can forgo stamp duty and get a monetary bump, even if those new developments aren’t in areas they want, with no accompanying infrastructure, and including the risk that the development could either fail or be delayed for an extended period.

This over-value of new properties is dumb. If the government wants to help young home buyers, which it always purports to want to do, then give the same helping hand to everyone, or buy up all the old property yourselves and bulldoze it on your own dime.

 

Jordan King Lacroix

Jordan King-Lacroix was born in Montreal, Canada but moved to Sydney, Australia when he was 8 years old. He has achieved a Bachelor of Arts from the University of Sydney and McGill University, Canada, as well as a Masters of Creative Writing from the University of Sydney.

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