Dumping first homebuyer grant on new homes would mean more job losses

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

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