Victorian Government's modified FHOG will kick-start industry: Hotondo Homes' Michael Renwick

The Victorian Government has followed the lead of the New South Wales (NSW), Queensland (QLD), Tasmanian (TAS) and South Australian (SA) governments and modified the First Home Owners Grant in a bid to boost the Victorian building industry and help reduce the state’s unemployment rate.

From 1 July the grant will increase from $7000 to $10,000 and only be available for eligible newly built homes.

Stamp duty concessions for first home-owners will also increase 40% from 1 July, for both established and newly constructed homes up to a value of $600,000.

By reinstating the new build bonus, the Victorian Government will entice young Victorians onto the property ladder; it will also create the positive spin off effect of boosting the residential construction industry at a time when the Victorian unemployment level is at a rate of 5.5%.

Data released by the Housing Industry Association two weeks ago shows new build figures in Victoria had sharply declined in recent times, down a massive 13.7%.

Research conducted by Hotondo Homes across its 29 Victorian franchises shows an average of 85 people are required to be on site at some stage during the building of a new home.

With each franchise in Victorian building an average of 10 new homes in 2012 (290 across the state), this equates to almost 25,000 people visits to these sites.

In almost all cases, these are local people involved in the manufacturing of new homes.

Currently the NSW and QLD governments offer grants of up to $15,000 to first-home buyers who purchase newly built homes or those bought directly off-the-plan. The Tasmanian Government offers $8000. In all of these states there is no financial incentive for those buying previously established homes.

The South Australian Government also offers a grant of $15,000 to those purchasing their first home, newly built or established. From July 2014 this will only be available for newly built places of residence.

Victorians did have access to a $13,000 First Home Bonus from 2010 to 2012 for new builds but this has since ceased to exist – until yesterday’s announcement by Treasurer Michael O’Brien.

By restoring the grant, the Victorian Government has provided the building industry in Victoria the kick-start it needs and will help the unemployment rate in the state as well.