The Victorian government announced last week that the First Home Owner Grant (FHOG) will be doubled in regional Victoria, helping thousands of Victorians buy their first home.
The grant will increase from $10,000 to $20,000, commencing on 1 July.
The changes from the Andrews Labor government will make it easier for young people in regional Australia to build homes in their own community. It’s also expected to boost local construction jobs and development.
The increased FHOG grant will be available to first-home buyers building new homes valued up to $750,000. It’s also an additional $50m investment in regional Victoria over the next three years.
“The grant will be applicable to contracts signed from 1 July 2017 to 30 June 2020, at which time, the Government will review the benefits for first-home buyers and businesses in regional Victoria,” the official statement said.
This announcement comes on the heels of the government rolling out changes to boost land supply, including the rezoning of 100,000 lots within two years in key growth corridors in Melbourne.
Premier Daniel Andrews has framed the grant boost as a major win for the local economy and first-home buyers. “By doubling this grant, we’re giving young people in regional Victoria even more reason to live locally,” he said. “We’re not making these changes in isolation. As our regional communities grow, we’re also investing in public transport, local roads, and the schools and hospitals they need.”
On the other hand, Martin North, principal of Digital Finance Analytics (DFA), said such grants simply lift prices by the same amount. “Whilst we understand the political agenda, this move is unlikely to improve housing affordability and access to property,” North said.
According to analysis undertaken by the DFA, first-time buyer transactions had a small trickle-down effect on households looking to trade up, and this flowed into price increases up the market.
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