First home buyers in Perth and elsewhere across Australia are being encouraged by the government to have new homes built instead of buying established ones. The new home owners will receive a larger ($10,000) cash incentive to construct rather than move into one that’s already standing ($3,000). Some cities offer more for building new homes, while others do not provide grants for buying a house that’s already up.
A boost for first time buyers
The incentives took effect on September 25th when the economy of Western Australia took a downturn. This occurred due to the drop in demand for housing which in turn was triggered by a population decline. Since then, first home buyers have shifted to take advantage of the substantial First Home Owners Grant (FHOG) which used to be pegged at $7,000.
Renting vs. Owning
Another contributor to the decrease in the demand for housing was the increase of residential renting. Many families opted to pay eased rent and maintain their budget for life essentials rather than plunk down a large amount for a home and have very little left. All that has changed now.
Economic shot in the arm
It used to be that one new house was built for every four established homes that were bought. Now 40% of all homes purchased are brand new. It seems the effort to jump start the economy via the housing industry has succeeded and many Australians have a roof over their heads to show for it.