Calls to extend first home owner grant to established homes in WA

The first home owner grant (FHOG) needs to be extended to established homes in Western Australia, to ease the pressure on construction and help more young people into property.

According to Peter Gavalas from Resolve Property Solutions, Perth’s ongoing shortage of tradespeople and builders has severely impacted new home construction and made it impossible for first-home buyers to build a home.

“The construction industry in Perth is in a tight spot,” Mr Gavalas said.

“We’re seeing extended delays and financial strain due to the backlog of projects. 

“Unfortunately, this means first-home buyers have fewer new homes to choose from, limiting their options in an already competitive market.”

He said allowing established homes under the FHOG would mean first-time buyers could enter the market sooner.

 “With the construction sector in turmoil and the rental market so tight, we need to adapt our strategies to support first-home buyers,” he said.

“Including established homes in the FHOG could be a game-changer for many, giving them access to a wider range of properties and helping to balance market dynamics.”

​​In WA, the FHOG currently offers $10,000 to help first-home buyers purchase or build a new home.

However, only new or heavily renovated homes qualify under the FHOG, Mr Gavalas said.

He said extending the scheme would also allow people to buy in inner city areas, which are closer to family and friends.

Mr Gavalas also said allowing infill developers to pay many of the costs of a development project once it was complete, could also help ease the crisis.

“Building costs are very high, and there’s a lot of costs upfront, which means projects don’t always stack up,” he said.

“They could relax or postpone costs like headworks and the statuary costs until the back end of the project.

“That could potentially encourage more more development in the inner city and middle ring.”

Mr Gavalas said with subdivision costs often upwards of $50,000, it could be a way to encourage more development.

“It makes it less of a financial impact to get the project started,” he said.

Last week data showed WA’s population was growing at the fastest rate in the country, with nearly 68,000 overseas arrivals landing in the state in just 12 months, in addition to 11,000 from interstate.

Mr Gavalas said something that rate of population increase was unsustainable and the construction industry could not keep up with demand.

“They can’t keep up,” he said.

“They need more properties.”

“I think we’re looking at a decade of undersupply and it’s not likely to change until 2030 I’d say.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.