Raine & Horne calls on WA Government to deliver first home buyer certainty

Media release - 29th May, 2015

Leading real estate group Raine & Horne is calling on the WA parliament to provide first home buyers with more certainty following the recent budget announcement that the $3,000 First Home Owners Grant (FHOG) will be terminated.  

“We aren’t entirely thrilled that the WA government has seen fit to axe the $3,000 FHOG for established properties,” said Larry Gallagher, Principal of Raine & Horne North Perth.

“There’s the added complication that the FHOG can’t be halted until the obligatory legislation passes through the WA parliament and this is creating some confusion in the marketplace.

“Until there is a deadline, we don’t expect much urgency from first home buyers, which will leave the road clear for savvy investors to continue to cherry-pick the entry level market.

“However once the legislation passes, whether its next week or next month, we expect there will be a spike in demand for affordable real estate in Perth and even higher prices as first home buyers jostle with investors in a bid to beat the FHOG deadline,” said Mr Gallagher, who has listed a one bedroom apartment at 67/12 Tenth Avenue, Maylands for sale for $237,000. The property is currently generating a weekly rent of $310 a week.

“This sixth floor apartment in a secure complex is just 300 metres to Maylands Station, while the suburb’s emerging cafe/restaurant precinct is attracting plenty of attention,” said Mr Gallagher.

“This is a great opportunity for a first time buyer armed with a $3,000 FHOG to get a toehold In Perth’s inner city real estate market and they should act fast before the grant ends or a yield-hungry investor beats them to this gem.”

Paul Curran, Principal of Raine & Horne Rockingham Beach, agrees that the decision to terminate the FHOG is disappointing.

“The first home buyer market in Rockingham is already negligible, and the decision to cut the $3,000 grant will do little to encourage them back,” said Mr Curran, who has listed a clutch of two bedroom apartments for under $280,000, including 9/5-7 Jesmond Street, Safety Bay, which is selling for $235,000 and renting for $255 a week.

Raine & Horne Rockingham Beach has also listed affordable two bedroom apartments in Rockingham, Shoalwater and Orelia. This includes a two bedroom apartment at 7/15 Pudney Place, Orelia, which comes with a study and a garage. Located in a modern complex, with an attractive pool and outdoor area, Mr Curran expects this apartment will fetch $249,000.

“In addition to keeping the $3,000 FHOG, I’d like to see first home buyers under 35 given the opportunity to access their superannuation to help fund a deposit,” said Mr Curran.

“The caveat here is that the homeowners need to pay back this amount into superannuation when they sell the property down the track.

“Accessing superannuation to buy a house is a sensible move because paying off a mortgage is arguably the best wealth creation tool.

“Shaving $25,000 off your home loan via a deposit generated from superannuation is like giving someone a 4% interest tax-free investment, which is competitive against the yields produced by cash and shares.

“In addition, a quality, well-located, owner-occupied property will also generate decent long-term capital growth, which is a capital gains tax-free return.”

–ENDS–

For further media information contact:

Andrew Harrington, National Communications Manager, Raine & Horne on 02 9258 5400