Media release - 13^th September, 2012

FHOCG effective from 12 September, 2012

• QLD Government scraps $7,000 first-home owners grant (FHOG) in state budget
• The FHOG to be replaced with a $15,000 First Home Owner Construction Grant (FHOCG) for new and off-the-plan properties

In the Queensland Budget announced yesterday, first home buyers in Queensland will be able to claim a $15,000 First Home Owner Construction Grant (FHOCG), to cover some of the costs of buying a new home, including off-the-plan apartments.

The FHOCG is effective from 12 September, 2012, and applies to homes valued at $750,000 and under.

“The FHOCG is a significant win for aspiring homeowners considering a new home purchase, however those wishing to purchase an existing apartment or house must make a move by 11 October, 2012 to grab the current $7,000 first home owner grant (FHOG),” says Angus Raine, CEO of leading real estate group, Raine & Horne.

“The changes echo a similar move by the NSW Government in its June budget, yet there is still the issue of a housing shortage in Brisbane and regional Queensland, where the gap between demand and supply for new homes is about 55,000 dwellings.

“As in NSW, the Queensland state government must look at cutting the red tape associated with building new homes, such as slow local government approval processes and infrastructure charges, to enable the FHOCG to have some real impact.

“Typically, building a new home is often too expensive for a first-time buyer, while new land releases might be located in outlying suburbs, where first home buyers won’t necessarily want to live,” says Mr Raine.

According to Rod Moffatt, Network Manager, Queensland, Raine & Horne, a holistic and innovative approach to resuscitating the Queensland property market is required.

“Given local government authorities and the state government control significant parcels of land suitable for residential development, both could potentially play a more significant role in delivering serviced building allotments to the first home market more quickly and, importantly, at competitive prices,” says Mr Moffatt.

That said, purchasing a new or off-the-plan home is not as popular with first home buyers as the Queensland Government would like to believe.

Dennis Wey, Principal of Raine & Horne Beenleigh, applauded the QLD government's initiative to kick start the ailing residential building sector, but he’s concerned the end of the FHOG may detrimentally impact the recovery of the established residential property market.

“This is a difficult situation as the Beenleigh market is rich with potential first home buyers but with the changes to the government subsidy, many of them will no longer be able to make the jump into the housing market.”

“I don’t think there will be many $15,000 grants given once the new grant has taken effect, saving the Queensland Government a bundle of money.”

“However, once they see the negative impact the changes will have on the housing market, they will eventually decide to reinstate the $7,000 grant or, in turn, something similar.”

Despite the government-inspired hit, Mr Wey reveals that Beenleigh real estate has enjoyed a fantastic start to the Spring selling season.

“The last two weeks have been the best two weeks we’ve had in 2012, and we’ve seen evidence of first home buyers racing to secure a property before the changes take place.”

“Most of our first home buyers are looking to purchase in that $200,000 price range because they struggle to afford anything higher.”

For those considering a property sale this Spring, contact Raine & Horne Beenleigh on 07 3287 4177.

For further media information contact:

Angus Raine, CEO, Raine & Horne 0409 920 697

Andrew Harrington, National Marketing & Communications Co-ordinator on 02 9258 5400