Buyers tap $1billion in First Home Owner Grants

18 July 2001

First home buyers have collectively received $1.03 billion from the Federal Government under its two housing grant schemes.

More than 14,300 South Australians have received about $100 million from the Federal Government's first assistance package to new home buyer's since it began in July last year.

The figures show that in the year to June 30, 147,126 grants were approved. Most of these were for the $7000 scheme brought in last year to counter the effects of the GST.

After lobbying by building industries and because of a fall in new dwelling construction, attributed to the imposition of the 10 per cent GST, the scheme was modified in April and increased to $14,000 for first-time owners building or buying a new home. The figures do not distinguish between the two schemes.

The initial Budget allocation for the $7000 grant was $763 million for four years, plus $150 million for the $14,000 scheme, which expires on December 31.

However, the $7000 grant total has already been exceeded by about $200 million and indications are that the $14,000 scheme could also exceed its allocation.

New South Wales has accounted for 43,879 grants valued at more than $307 million followed by Victoria with 34,163 worth in excess of $239 million and Queensland with 30,044 exceeding $210 million in value. Then comes Western Australia with 15,922 ($111 million), SA with 14,323 ($100 million) and Tasmania with 4353 ($30 million). ACT has 3055 ($21 million) and Northern Territory came in at 1387 ($10 million).

Record building approvals for May suggest a rush to the home grant since it began in April. Nationwide new dwelling approvals rose 25.9 per cent for the month, with analysts pegging low interest rates and the $14,000 grant to the rise.

From January 31, only about 7 per cent (5680) of the 82,350 grants issued had gone to new home buyers.

More than 76,500 went to established properties.

Treasurer Peter Costello said the first home owners grant had made home ownership a reality for thousands of people who otherwise would not be able to own their own homes.

"It has also been good for the building industry, which is showing signs of very strong growth and creating increased employment," Mr Costello said.

Housing Industry Association senior economist Simon Tennent said the 147,000 home grants issued so far was a "good number".