Tasmania Gets Australia’s Biggest Home Building Grant

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Friday, November 8th, 2013
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Tasmania now has the biggest housing construction incentive scheme anywhere in Australia following a decision by the state government to more than double the value of a grant which provides cash to first home owners who buy or build a new or newly constructed home.

Tasmania now has the biggest housing construction incentive scheme anywhere in Australia following a decision by the state government to more than double the value of a grant which provides cash to first home owners who buy or build a new or newly constructed home.

At a Jobs Forum held in Launceston on Thursday, Tasmanian premier Lara Giddings said effective immediately, the state’s First Home Builder Boost will be doubled from $15,000 to $30,000.

Giddings says the boost to the grant follows a slower than expected take-up of the existing grant, which was more than doubled from $7,000 to $15,000 at the start of the year.

“Builders have told us that there has been a lot of interest from people wanting to build their first home, but they needed more time to accumulate a deposit” Giddings says, adding that whilst take-up of the grant was expected to accelerate over time, the state needed to create jobs now.

“That is why we have taken the decision to turbo-charge the incentive for people to build their first home, effectively paying the cost of a deposit on an average new home build.”

The latest moves come as the home building industry in Tasmania continues to labour under extremely poor conditions amid an economy which has been shrinking for the past two years and virtually zero population growth, notwithstanding the low interest rates and relative affordability of housing throughout the state.

In its most recent forecast, Housing Industry Association says it expects the number of new houses breaking ground throughout the state to come in at just 1,690 in 2013 and 1,780 in 2014 – the first time in more than a decade start numbers have come in at less than 2,000 during and representing barely half the annual numbers of starts which were common throughout the 2007-10 period.

HIA Executive Director Stuart Clues welcomed the changes, saying the idea of limiting the grant to new residential construction only means the policy should avoid ‘the usual criticism from naysayers’ that it would merely increase house prices.

Clues says the moves will help close a gap which has recently emerged between existing home sales which are starting to move and a continued languishing of new home construction, and that the benefits in terms of employment will spread beyond the construction industry – which he says has shed 5,000 workers over the past twelve months.

“Every time a new home is built it generates significant flow-on employment to around 35 other small businesses from carpet layers and whitegood sales to landscape supplies” Clues says.

Giddings says the grant is now the most generous in the nation, and that the state offers a good lifestyle and some of the cheapest parts of the country in which to buy a home.

The current scheme will run until December 2014, with the cost expected to be paid for using unspent money from the existing First Home Owner Grant budget.

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