Western Australia to cut off home loan help
The WA government will be cutting its boost to first-home buyer grants six months earlier than planned.
The recently-elected Labor government will end Western Australia's $5,000 boost payment on 30 June, rather than the December cut-off, announced when the previous Coalition government enacted the plan.
"The boost is not an effective mechanism for stimulating additional construction of homes and given the disastrous state of the finances which we have inherited, we need to remove any ineffective spending," WA treasurer and finance minister Ben Wyatt told the Australian Financial Review.
While first home buyers purchasing a home up to $750,000 will still be eligible for a first home owner grant of $10,000, the WA government believes winding back the grant boost will save $20 million. However, one of Australia's largest home builders has questioned the government’s estimates.
"You're not going to actually save $20 million because our industry isn't running at an annual building approval rate of 40,000 [houses]," ABN Group managing director Dale Alcock said.
"First-home owners in WA are probably about 20% of the market. So if one in five are first-home owners and you're looking to save $20 million by reducing each one by $5,000, that means you're going to actually have 4,000 eligible first-home owner grants that will be reduced. Multiply that by five and you get 20,000 approvals in six months."