FHOG schemes should be reviewed, abolished: finder.com.au

FHOG schemes should be reviewed, abolished: finder.com.au
FHOG schemes should be reviewed, abolished: finder.com.au

Market analysts believe First Home Owner Grant (FHOG) schemes should either be reviewed or abolished, according to a finder.com.au survey.

The finder.com.au survey is the largest of its kind in Australia. 

When asked about their views on first home owner grants and schemes across the country, 69 percent of experts said it’s time to review or abolish these schemes; 38 percent of respondents believe first home buyer grants and schemes should be abolished, while 31 percent say State and Federal Governments should review first home buyer schemes.

finder.com.au insights manager,  Graham Cooke, said it’s important that first home buyers get a foot on the property ladder, but not at the cost of increasing property prices.

“If you live in a capital city such as Sydney or Melbourne, there is a very high barrier to entering the market in terms of the financial resources required to secure a property. While first home buyer grants may allow you to enter the property market sooner, they can also increase the funds going into the housing market, possibly driving up prices," he said.

“These grants also require buyers to live in the property for a specified time, and are therefore not available to first time investors who may choose to buy a property in a more affordable area, and rent elsewhere.”

Mr Cooke says there is a strong belief that First Home Owner Grant schemes need review.

“The general view is that these grants artificially inflate the price of new dwellings at the cost of the taxpayer," he said.

“The national homeownership rate has been declining and the First Home Owner Grant hasn’t solved Australia’s housing affordability problem. It could be time for the state and territory governments to review relevant schemes to provide greater accessibility for first buyers. Stamp duty discounts or land tax rebates may need to be revisited.

"First home buyers should be careful not to overextend themselves in the current low interest rate market. A buffer of 2-3 percent should be factored in on top of your current interest rate to allow you to service any future rate hikes comfortably."

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
First Home Buyer Housing Grant

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