When the FHOG was introduced in July 2000, the Australian quarterly weighted average median house price was $220,443. The Australian weighted average median house prices in the most recent quarter for which data is available, September 2009, was $481,310.
“The FHOG is one of the most important housing policy instruments in assisting first home buyers with housing affordability but it needs to be relative to the current market. The median house price has increased by more than $250,000 in less than 10 years and the grant has not maintained relativity”, continued Mr Airey.
The graph below shows the contribution of the grant towards the purchase price has more than halved from 3.2% to 1.5% over the period. The proportion of the FHOG in median house prices exhibits a downward trend since the introduction of the grant.*
Additionally, as part of a package of measures to address the affordability problem, REIA has proposed that the Commonwealth Government establish a scheme which would encourage young Australians to contribute to voluntary superannuation by allowing access to these resources for the purposes of raising a deposit for a first home.
The scheme would be an adjunct to the First Home Savers Account but would allow flexibility for the saver to decide whether all or part of the voluntary superannuation payments was needed to augment the home purchase.
“Although the Boost has helped the participation of first home buyers in the market, it was a short term measure and we need to be looking at long-term solutions”, concluded Mr Airey.
*Except in those states/territories which have stamp duty concessions for first home buyers, when stamp duties are taken into account the decline is even more marked.
Source : www.riea.com.au