Housing affordability is on top of housing group agendas. The Real Estate Institute of Australia (REIA) is urging the federal government to introduce a nationwide first home buyer grant that applies to all housing. While the Housing Industry Association (HIA) is stating that new house and land combinations are likely to become more affordable.
The Real Estate Institute of Australia
Recently, the REIA put in a pre-budget submission calling for reform to the first home buyer grant system. This, they say, would help to resolve the problem of housing affordability for new buyers.
The submission stated that new buyers are finding it increasingly hard to enter the market. This, in turn, is seeing first home buyer numbers fall.
According to research, many first home buyers are saving for longer in order to reach their deposit target, and many are over-reaching themselves. Plus, some are electing to use other sources to raise the deposit for their first home, rather than saving. For instance, some are selling other assets.
The Real Estate Institute feels that grants for new dwellings discriminates against first home buyers searching for an existing home. And while first home buyer grants of this nature are put in place to assist the construction industry, less than 20 percent of new home buyers elect to build a new home.
The group argues that in many instances the seller of an established home often builds a new home after they sell their property. Furthermore, first home buyers who purchase lower-valued established homes usually renovate and improve the property, which can provide the building sector with greater stimulus.
The Housing Industry Association
The Housing Industry Association (HIA), on the other-hand feels that new house and land combinations may become more attractive to first home buyers in 2015. This, they say, is attributed to interest rates continuing to fall andthe demand for established homes rising and pushing up property prices.
HIA chief economist Harley Dale is predicting that low interest rates will push up the price of established property. However, the price of new homes grow at a slower pace.
Overall though, new homes represent better value for money as they offer modern finishes and they’re energy efficient. Plus, once they’re established their prices begin to rise.
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Written by eChoice