Another peak industry body has weighed in on the future of the First Home Owners Grant with a social media campaign designed to implore the State Government to retain the $10,000 boost.
Master Builders WA has launched a new online campaign with the slogan “Our future is foggy without the FHOG”, fresh from REIWA calling on the State Government to implement a range of tax reforms designed to stimulate the WA property market.
The FHOG for new homes was cut from $15,000 to $10,000 at the start of the fiscal year in a bid to retain $20 million in the State Government’s coffers.
When the $5000 cut was announced in May, there was a steep increase in the number of FHOG applications for new homes from buyers rushing to secure the boost payment, resulting in a jump from 552 applications in April to 811 in May.
Master Builders WA housing director Jason Robertson said the association had been a long-term supporter of the grant.
“Master Builders has long advocated for the importance of the FHOG, including our success at lobbying the State Government to have the boost payment,” he said.
“The fairly sudden announcement from the Treasurer to bring the grant back down to $10,000 didn’t make sense to us at all so we continued to engage with the State Government to reconsider.
“And now we have this particular campaign because the Treasurer has indicated the FHOG could be reduced or abolished in the upcoming Budget.”
Mr Robertson said Master Builders WA’s 2000 members were behind its campaign.
“It’s our mandate to clearly articulate to the Treasurer how much the building industry contributes to the WA economy in terms of employment as well as its kindred and knock-on effects,” he said.
“The building industry is always a good barometer for how well a state’s economy is doing.
“We recognise that our members in both the metro and regional areas are struggling at the moment so doing away with the FHOG in the current economic cycle would be disastrous for our industry and the WA economy.”
Master Builders executive director Michael McLean said almost all other states and territories have recognised the importance of retaining and, in some cases, increasing the FHOG in order to stimulate much-needed economic activity.
“Unfortunately, with WA’s economic fortunes languishing, the housing industry still requires a financial stimulus to meet the expectations of prospective homebuyers,” he said.
“The simplest and most effective way of achieving this is for the McGowan Government to retain the $10,000 FHOG.
“Master Builders recognises that, like many of our members, prospective homebuyers are doing it tough at the moment.
“In order to keep their dream of home ownership alive, they also need the $10,000 FHOG.”
Key industry figures, including award-winning builder and Master Builders WA state president Rob Spadaccini, have voiced their concerns over the potential loss of the grant.
“With population growth down, the housing industry in a depressed state and with only 19,000 homes forecast to start in the 2017-18 financial year, we need the First Home Owner Grant for the wellbeing and for the future of our industry,” Mr Spadaccini said in a video distributed as part of the campaign.
Summit Homes Group metropolitan general manager Tony Harvie said the removal of the grant would prove “detrimental” to the residential building industry.
“The FHOG has been a powerful incentive to make it easier for first-home buyers to jump on the property ladder, with buyers often using the grant to help cover the upfront fees associated with purchasing their new home, such as settlement costs, rates and legal fees,” he said.
“In addition, we’ve seen certain major banks pushing the loan-to-value ratio lower, which means clients need more of a deposit particularly to cover lender’s mortgage insurance.
“Removing the grant all together would mean first-home buyers will need to delay their decision to build a new home as they try to save for a large deposit, which is not always possible.”
Mr Harvie said sales had been dramatically affected since the FHOG was reduced to in June.
“Across all residential builders, removing the grant will no doubt affect the number of new home starts,” he said.
“Naturally, any decrease in the number of new homes we build has a flow-on effect to a reduction of workload for our contractors and number of opportunities for apprentices.
“We urge the government to keep in mind our state’s economy and employment opportunities in reviewing their decision to abolish the grant.”
MASTER BUILDERS WA’S FIVE KEY BUDGET MESSAGES:
• WA’s building industry will continue to struggle unless the State Government retains the $10,000 FHOG in the next budget.
• More than 20 per cent of local builders will be pushed to the wall if the FHOG is abolished.
• Jobs for trades and apprentices will decline as work in the first-home buyer sector dries up.
• The next generation of first-home owners will not be able to enter the housing market without FHOG. Removing it effectively kills the Great Australian Dream.
• This dire situation will be compounded in regional WA, which is already struggling.
Originally published in Eastern Reporter Newspaper on August 29th, 2017. To view the online version, click here.