Back to All News

First Home Owners Grant too blunt a tool to boost housing supply - Greens

Media Release
Rachel Siewert 17 Jun 2008

The Australian Greens are urging caution in the face of calls to boost the level of funding offered under the first home owners grant scheme for new home buyers and less funds for those buying established homes.

"This is not the way to go if we wish to increase the number of families who can own their own home without pushing up prices in an already overheated housing market," said Senator Rachel Siewert today.

"The first home owners grant is a very blunt tool for boosting supply. The Senate committee received strong evidence to this effect from both the Reserve Bank and economist Ross Gittens."

"If we are looking for a mechanism to boost supply without increasing inflationary pressures then we need to focus on measures that directly add to the number of appropriate and affordable new houses coming onto the market," she said.

"The first home owners grant should be about helping more young families who are locked out of the market to afford a home - not giving more money to those who can already afford to enter the market so they can up their aspirations."

"Its supposed to be about equity - not middle class welfare," said Senator Siewert.

"Encouraging young families to buy a new house will push them out onto the growing urban fringe - away from the jobs and services they most need at this time of life, and into increasing transport costs as petrol prices continue to soar."

The Australian Greens report recommended means testing the first home owners grant and capping the value of the property it can be used to buy. At the same time it advises more direct means of increasing supply based on successful international models from the US and Europe.

"The best way to tackle the housing crisis is to increase the number of new affordable houses by investing more in shared equity schemes with not-for-profit community housing providers," said Senator Siewert.

"The big growth area in affordable housing in the United States is through Community Land Trusts and Deed Restricted Mortgages. These schemes, which create affordable housing in perpetuity, are responsible for thousands of new units of affordable housing being developed in a number of major inner city areas across the US," she concluded.

Back to All News