First homebuyers, rejoice! You whinged about houses being unaffordable for so long that it now seems your prayers have been answered.
In the Queensland State Budget handed down yesterday, it was announced that if you build or buy a brand new home in the next 12 months (from 1 July), you’ll be gifted $20k from the government towards the cost of your home, up from $15k previously.
Sure beats the $7k I received to buy my first townhouse in regional Queensland 10 years ago… And it beats the $0 my brothers and sisters received before me!
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Couple this FHOG win with reduced stamp duty, and first homebuyers are laughing.
Then factor in potential changes to negative gearing if Labor gets into power in the Federal election, and first time buyers will really have no excuse to whine about it all being “too unfair” and “too hard” to buy their own home.
But they probably will. And do you know why?
First of all, they’ll panic when they realise the entire property industry as a whole is going to be impacted by these changes, for a very long time.
As Dan White, Director Ray White Group, points out, “property investors are not just landlords – everyone who has any financial interest in property, including the 67% who own their own home as well the 18 million who have a stake in property through their super, is ultimately a property investor too.”
Property markets are already set to be subdued, with a weaker job market and tighter lending by the banks playing their part in making investors nervous about sinking their money into real estate right now.
Slash negative gearing benefits, and investors will all but disappear from the market.
Fewer landlords equates to fewer rental properties. It’s a simple matter of supply and demand: when there are more tenants than properties available, competition will become fierce. It doesn’t take a genius to work out that rents will therefore increase.
Then all of those people who complained about sky-high housing prices will start complaining that they now can’t save a deposit, because their rents are too high after “greedy landlords” deserted the investment market.
But at least they’ll get an extra $5k towards eventually buying their home. So not all is lost, right?
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