Home Buyer Grants Can Save You Thousands

State governments frequently offer bonuses to people building new homes or buying their first property, but many have strict deadlines attached. Property Observer has a useful state-by-state listing of current schemes and their expiry dates which is worth checking out if you're looking into your first home.

Picture by Henry Burrows

Unsurprisingly, the biggest bonus applies in regional areas keen to encourage development. There aren't options for every state (WA and Tasmania aren't listed), but for other buyers it's worth checking into your eligibility, since thousands of dollars are potentially in the offing.

Calendar of need-to-know deadlines for home buyers wanting government grants [Property Observer]


Comments

    The linked article is a useful summary of the stimulatory Home Vendors' Bonuses.

    First home buyers in particular should do their research re current market conditions for their area and not be scared or bullied into rushing into the property market simply because a bonus is ending.

    I am a mortgage broker based in Sydney and see a lot of confusion on this topic and a lot of people that just aren't aware of the changes coming in at the end of this year for NSW.

    It's great that lifehacker is giving this a bit of publicity now rather than seeing the typical end of year rush creating more artificial demand which will drive up house prices as much as the stamp duty exemptions anyway.

    "Home Buyer Grants Can Save You Thousands". Rubbish. For god's sake, home buyer grants (leveraged up 10x) get factored straight into the selling price set by the seller.

    The grants do nothing but keep the housing market afloat. They definitely DO NOT save the first home buyer money. F**k me people need to wisen up in this country.

    Home Buyer Grants can NOT Save You Thousands!

    Because the grants are used to bid up prices, they end up being a direct subsidy to sellers. Most of which, are already rich in the first place because they are property owners.

    Everyone expect politicians hate these things. They are a gimmick. They do not help first home owners.

      I don't think you can just say that outright. Economics says that price shocks are passed on depending on the relative elasticities of demand and supply - perhaps most of the grant just increases prices, but it's more likely that at least some of it is a genuine saving for the buyer.

      On top of that, the point of the grant is to make it easier to buy your first home. As a first home buyer compared to an investor the grants give you a substantial boost in terms of what you can offer, as well as making it easier to save up a deposit. Surely in that sense the grants are successful on some level.

      Of course there may be better ways of helping people buy their first home, but if you're making it artificially cheaper for a group of people to buy, prices are bound to rise due to the increased demand from that group.

        The only way elasticity would come into play is if supply was perfectly elastic (i.e. horizontal supply curve). However that would mean house suppliers would be completely unresponsive to price changes. Even if you had a crazy world with a horizontal housing supply curve, the FHOG would merely shift the demand curve but result in no change in prices. There is absolutely no positive impact from the FHOG - as Economist mentioned, it merely allows consumers to bid up prices.

        NoName = legend!

        Sam

        First of all, we are not talking about “price shocks” which are a supply side phenomenon. FHOGs are a demand side measure which do nothing to encourage the construction of new dwellings. All they do is put extra cash into the hands of buyers.

        For some reason, the government thinks it is culturally significant for people to own their own home (God Bless America). The real problem is affordability. FHB’s can’t afford to buy a house because either (1) the price is too high or (2) they are poor (sad face for poor FHB’s).

        We have two options to deal with this. (1) Decrease the price of housing or (2) make FHB’s rich. FHOG’s attempt to ‘make them rich’. But as I discussed they don’t work because FHB’s take the extra money and bid up the prices which completely undoes any relativity ‘rich’ advantage they had.

        But we still have option 1 - make house prices cheaper (I won’t even go into housing as superannuation and the problems with this). Anyhow, there are two options to make housing cheaper (a) decrease demand for housing or (b) increase supply of housing. FHOGs INCREASE the demand for housing, the exact OPPOSITE of what we want. Fail Fail Fail.

        Last but not least, we have the option (b) increase supply - which actually works. It’s possible to increase supply by releasing more land, reducing the regulation and administration burden, getting local councils to realise that St Kilda IS NOT THE COUNTRY and medium-density housing is the future, and convincing bogans that FHOGs don’t work.

          Cheers for clearing that up.

    ^^ Bingo "Economist". Everyone except politicians and mortgage brokers though ;).

    Very true 'Andy'.

    Lets see who likes FHOGs: politicians, mortgage brokers, ACA viewers, Herald Sun 'readers', etc... I think i'm starting to see a pattern here. Bogans. Bogans like FHOGs.

    At least it covers your mortgage insurance so one less thing for the first home buyer to worry about...

    Worth noting, Tasmania isn't listed on the website because there is no state home buyer grant in force down here.

    Sadly, these grants have become essential for many seeking to buy their first house. It is the grants themselves that have helped to create this situation.

    There are many other factors, like the push to make property investment more attractive through negative gearing, and grants were intended to combat this, but instead of addressing the problem, they have compounded it.

    As unpopular as this will sound, the property market in Australia needs a correction. Perpetual growth is not sustainable.

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