{"id":39506,"date":"2022-07-11T11:07:11","date_gmt":"2022-07-10T23:07:11","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=39506"},"modified":"2022-07-11T11:07:11","modified_gmt":"2022-07-10T23:07:11","slug":"governments-spent-20-5b-on-first-home-buyer-help-that-pushed-up-prices","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/governments-spent-20-5b-on-first-home-buyer-help-that-pushed-up-prices\/","title":{"rendered":"Governments spent $20.5b on first home buyer help that pushed up prices"},"content":{"rendered":"

PHOTO: First home buyer grants push up property prices, experts say.\u00a0Photo:\u00a0Simon Schluter<\/span><\/strong><\/p>\n

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Australian governments spent more than $20.5 billion on first home buyer<\/a> help in the past decade, which made housing affordability worse by driving up property prices and left existing homeowners richer, new research found.<\/p>\n

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NSW Budget to give first home buyers the option to avoid lump sum stamp duty<\/a><\/h2>\n<\/header>\n<\/div>\n

The money was largely spent on various forms of first home buyer assistance, such as cash grants and stamp duty concessions, which were on the rise even before the pandemic \u2013 more than doubling from $1.2 billion to more than $2.5 billion in the four years to 2020.<\/p>\n

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The Australian Housing and Urban Research Institute\u2019s study examined first home buyer programs in Australia in comparison to seven other countries, including Canada, Finland, Germany, the Netherlands, Singapore, Ireland and the UK.<\/p>\n

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Up to 50,000 Australians eligible for \u2018major\u2019 expansion of First Home Buyers Scheme<\/a><\/h2>\n<\/header>\n<\/div>\n

It found that Australia stood out for providing demand-side support instead of increasing the supply of homes available, as well as its lack of strategic framework and little improvement to the stagnant homeownership rate.<\/p>\n

The report compiled total spending by state and federal governments over a decade on stamp duty concessions, First Home Owner Grants, and the pandemic-era HomeBuilder program.<\/p>\n

It criticised the effect of these grants, which provide cash to buyers who then spend it at auction, flowing into the pockets of home sellers.<\/p>\n

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How first home buyers could use super cash as security to get into the housing market<\/a><\/h2>\n<\/header>\n<\/div>\n

Senior Research Fellow in the City Futures Research Centre at the University of NSW and report author Dr Chris Martin said various governments in the decade to 2021 had very little to show for the billions spent.<\/p>\n

\u201cThat\u2019s $20 billion of public monies spent into the housing system for no housing policy outcome,\u201d Martin said. \u201cThere are lots of other ways you could spend $20 billion to get housing policy outcomes like whether it\u2019s rent assistance, which doesn\u2019t have the same housing cost inflationary effect, or even better spending on housing that\u2019s going to be affordable rental for the long term,\u201d Martin said.<\/p>\n

He said that money was wasted by making housing affordability worse, and it has benefitted existing homeowners instead.<\/p>\n

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\"HomeBuilder\"<\/a><\/div>\n
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First home buyers prepare to cash in as the government offers generous $25,000 grants and add an extra 10,000 places to its first home loan deposit scheme<\/a><\/h2>\n<\/header>\n<\/div>\n

\u201cIt\u2019s worse than a waste [of money]. It\u2019s money that has gone into making a problem worse \u2026 and it ends up going into inflating home values,\u201d Martin said.<\/p>\n

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The research found the money ultimately benefitted existing homeowners. Photo: Flavio Brancaleone<\/figcaption><\/figure>\n

\u201cIt ultimately goes to first home vendors. That\u2019s who it really assists and governments really don\u2019t get anything to show for it.<\/p>\n

\u201cIt\u2019s people who already have housing wealth who ultimately benefit from the first home buyer assistance schemes we have and the refusal to do anything else to restrain speculation in housing.\u201d<\/p>\n

To give some sense of the scale of the money spent, the report said the $20.5 billion could have funded 60,000 social housing dwellings, or alternatively, 137,000 shared-equity dwellings.<\/p>\n<\/div>\n

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