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Restrict first homebuyer grants to purchase of new homes to stimulate construction jobs; Urban Development Institute of Australia (UDIA)
Topic Started: 5 Apr 2012, 01:43 PM (765 Views)
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Dumping first homebuyer grant on new homes would mean more job losses

Posted on Thursday, April 05 2012 at 12:30 PM

First homebuyer grants should be restricted to the purchase of new homes to stimulate construction jobs rather than dumping the $19,500 incentive across the board, according to the Victorian branch of the Urban Development Institute of Australia (UDIA).

The Real Estate Institute of Victoria’s call to dump the First Home Buyer Grant recently was “ill conceived” with serious potential consequences on construction jobs, said UDIA Victorian executive director Tony De Domenico.

A Victorian Government newsletter recently reported that only one quarter of first homebuyers over the past 10 years chose to use the government grant to build a new home, highlighting that the First Home Buyer Grant available for the purchase of new homes and existing homes in Victoria isn’t effective enough in stimulating construction jobs.

UDIA Victoria said purchasing existing homes didn’t boost employment, whereas new homes do and should be taken into serious consideration by government if considering axing the incentive.

De Domenico said the Victorian property industry employs 310,000 full-time employees, contributes around 12 per cent to the state’s gross domestic product and $4.6 billion in taxes to all tiers of government.

"Behind the construction of every new home stands the employment of a range of tradespeople, employment networks of suppliers and ultimately the retail sector with homes requiring white goods, furniture and services," said De Domenico.

“Investment in new dwellings is a major area of economic activity for thousands of small businesses across the state. At the same time Victoria continues to require housing supply because of population growth,” he said

Read more: http://apimagazine.com.au/api-online/news/2012/04/dumping-first-homebuyer-grant-on-new-homes-would-mean-more-job-losses
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earthsta
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I agree that any grants should only be directed at new housing. However first you would need to create a database of all builders' offerings to ensure that no price gouging occurs amongst the greedy fuckers.

While they're making policy changes, get rid of negative gearing on established houses as well, including no "grandfathering"

Prices would quickly normalise.
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Homebuyer grants have outstayed welcome

* by: Monique Wakelin
* From: Herald Sun
* May 26, 2012 12:00AM

WAYNE Swan says he'll do whatever it takes to put the federal finances back into surplus in 2012-13.

Many commentators are naturally sceptical he's done enough in his recent Budget to achieve this aim. Not only am I sceptical, I question why some obvious cost-cutting hasn't occurred.

Read more: http://www.heraldsun.com.au/business/homebuyer-grants-have-outstayed-welcome/story-fn7j19iv-1226367483895
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miw
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I can't see how any action that does not increase the nett demand for housing can create construction jobs. It's not as if the existing homes are going to be left empty. It will no doubt raise the price of the new homes that do sell, and possibly lower the price of existing housing but neither of those things will create any jobs.

If you want to increase the demand for housing, increase the rate of population growth or increase the rate of household formation (i.e. make people leave home earlier). Since I am not in favour of the former, I guess I should be plugging the latter. Impute a rent for all non-dependents living in a household and tax the owner whether they collect it or not. :D

If you want to help FHBs, it is easily done through transaction tax discounts. I can see no reason to spend taxpayers' money persuading people to build houses that are not needed. In the end money not spent on building houses can be spent on something productive.

The truth will set you free. But first, it will piss you off.
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