Building boost grant applauded

PROPERTY News

The new $140 million “Building Boost” grant scheme, announced as part of the state government’s 2011-2012 State Budget is a kick-start measure desperately needed by Queensland’s building industry, says the Master Builders, Queensland’s peak body for housing and construction.
Master Builders executive director Graham Cuthbert said Master Builders welcomed the decision to introduce a $10,000 incentive for all consumers building a new home in Queensland. “By announcing this new grant as part of the 2011-2012 State Budget, the government is recognising the vital role the building industry plays as a key driver of Queensland’s economy.
“For some time now, we have been calling for measures to boost our ailing industry, which has been struggling with the lowest activity levels in ten years. This announcement demonstrates the government’s commitment to providing immediate measures that will return the building industry to a more competitive state.
“We anticipate that this grant will provide a short-term boost in new home construction that our industry so desperately needs. And increased activity brings job creation – but not only jobs onsite. We know that for every job created onsite, a further five jobs are created throughout the supply chain.
“Master Builders identified a number of priority areas for the building and construction industry in our pre-budget recommendations, which have also been addressed in [the] State Budget.
“The government has announced a significant $15 billion capital works expenditure program that will help to ensure activity levels do not decrease further, particularly with the wind down of federal programs, such as the Building Education Revolution.
“Our call for financial incentives for businesses to retain apprentices has also been heard, with payroll tax concessions for apprentices, which should help to keep apprentices in work and ensure that when our industry does return to boom times, we are not faced with a skills shortage. “While the removal of previous stamp duty concessions is a blow, unfortunately tough decisions must be made during tough times. Overall, Master Builders is very pleased that the building and construction industry is being considered a top priority in the 2011-2012 State Budget for kick starting Queensland’s economy.”


... but stamp duty rise will ‘flatten market’

The decision in the Budget by the State Government to remove the stamp duty home concession will flatten the struggling Queensland residential property market and cost homebuyers thousands of dollars, the Real Estate Institute of Queensland (REIQ) believes.

The government announced that from 1 August the concession which non-first home buyers receive when buying a new or established home as their principal place of residence will be removed. For a median-priced house in Brisbane, homebuyers will now be hit with more than $15,000 in stamp duty– an increase of more than $7,000. First home buyer stamp duty concessions will remain for homes up to $500,000.
The government also announced a $10,000 grant for new-home builds. The Queensland Building Boost grant will be available for all people building, or buying, a new-build home or unit priced up to $600,000 between 1 August 2011 and 31 January 2012. REIQ chairman Pamela Bennett said while any incentive to increase housing supply and create jobs in the construction sector was a positive for the economy, the removal of the stamp duty concession for non-first home buyers will wreck havoc on the Queensland property market. About 60 per cent of all dwellings financed in Queensland in April were to non-first home buyers.
“The market is already the lowest it has been in many years and today’s announcement will just make it worse,” she said. “The government is obviously trying to fill the financial void that has been left by the weak property market, and the subsequent lower stamp duty receipts given the marked reduction in property sales over the past 18 months. “A better way to stimulate the economy would have been to provide financial incentives for all buyers of all types of properties which in turn would have increased activity and therefore helped the government’s bottom-line."
According to the REIQ, the $10,000 grant for new-builds might provide a much-needed shot in the arm for the building sector but its value will be greatly diminished by the increased rates of stamp duty that non-first home buyers will have to pay. It is also unlikely to assist more first home buyers into the market.
“There has been a huge reduction in first home buyer activity over the past year and this grant is unlikely to change that state of affairs to any significant degree,” she said.
“While the grant means first-timers will be able to access $17,000, as well as stamp duty concessions, purchasing a new-build home or unit continues to be out of the financial reach of most prospective homeowners.”