First home buyers Gold Coast: Dramatic drop in number using state government grants

The number of first home owner grants issued by the state government has seen a stunning decline. Here’s why.

The first-home owner grant has become “virtually redundant” on the Gold Coast because the very few new houses being built are too expensive.

However Treasurer Cameron Dick says there are no plans to change the grant, warning the government must be careful not to further fuel the growing cost of housing.

Data obtained by the Bulletin show the number of $15,000 grants issued on the Coast had collapsed from 1048 in 2020-21 to 460 last financial year, saving the state government almost $9m.

In contrast, Ipswich snapped up 915 grants and the Sunshine Coast 769.

The total number of grants across Queensland fell from 11,710 to 8347 in the last financial year, saving the government just over $50m, Treasury statistics show.

The stunning decline in grants comes as median house prices soar on the Gold Coast to more than $1m in most suburbs.

Treasurer Cameron Dick visits Modnpods in Arundel last week, which is a recipient of the Palaszczuk Government’s Business Investment Fund. Picture: Adam Head.

The Queensland first-home owner grant gives buyers $15,000 towards the purchase of their first home – but it must be a new build and valued at less than $750,000.

The $750,000 threshold has not been raised since the grant was introduced in September 2012.

Real Estate Institute of Queensland CEO Antonia Mercorella said the grant had become “virtually redundant” on the Gold Coast.

“To ensure that grants for first-time buyers remain relevant and useful, threshold amounts must be regularly reviewed,” Ms Mercorella said.

“The first-home owner grant was established in its current form in 2012. The threshold of $750,000 was arguably appropriate at that time when the annual median house price on the Gold Coast was $470,000 (as at March 2012). Today (as at March 2022), that annual median house figure sits at $888,000 – representing a whopping 89 per cent growth.

“Further, at a time when construction of new homes has reached a screeching halt, the first-home owner grant has become virtually redundant for most given it’s only available for new construction or the purchase of a new home.

“... With rising construction costs and financial entry barriers making building or purchasing a brand-new home simply unfeasible for many first-home buyers, surely, it’s time to extend this initiative to established housing options.”

In April, Zone Planning Group director David Ransom warned that developers were unable to find new sites.

“We have run out of greenfield land in this city,” he said.

“... We deal with developers all the time who’re looking for townhouse/greenfield sites for low-density product on the fringe of the city – there’s none left.”

Despite the low uptake of the first-home owner grant on the Gold Coast, Mr Dick rejected the suggestion that it is “redundant” and told the Bulletin the state government had no plans to raise the $750,000 threshold.

“I don’t think it’s redundant,” the Treasurer said. “Obviously we monitor these issues over time but we need to be careful not to fuel the growing cost of housing in any greater fashion than is happening already through the market.

“The purpose of that grant is really to help early entry into the housing market, but at this stage we wouldn’t be seeking to change it.”

A Treasury spokesperson said the government’s “primary focus” was instead increasing supply.

“The first-home owner grant (FHOG) is one element in a broad suite of measures the Palaszczuk government has to address housing affordability,” the spokesperson said.

“... The government’s primary focus on housing affordability is increasing supply, through mechanisms such as the $200m Growth Acceleration Fund announced in this year’s budget.”

THERE’S STILL HOPE: HOW ONE GOLD COAST FAMILY FOUND THEIR FIRST HOME

A Gold Coast couple say they feel fortunate to have got their foot on the housing ladder given the huge rise in property prices and rental costs.

Taylor and Nick Blom bought their first home, a townhouse in Highland Park, in January.

“I feel so grateful that we were able to get in at all,” Ms Blom said.

“I’m seeing prices just go up and up and up.

“Working families like us, you know, that are careful with rent, are just getting kicked out and left homeless. It’s so scary.

“I’m just so grateful that we’ve got that little bit of security now.

“And we actually put in a fixed rate with our interest, so we don’t have to worry about the big jumps that are coming.”

Ms Blom said they were delighted with their new home, which is ideally located a short walk from William Duncan State School where their five-year-old son Jack will start next year.

First home buyers Taylor and Nick Blom with their five-year-old son Jack and puppy Heidi at their new home in Highland Park. Picture: Mike Batterham.

The family have even added a new member since moving in – miniature dachshund Heidi.

But she admitted they had needed to temper their expectations after house price rises escalated last year.

“It’s just crazy how quickly things changed,” Ms Blom said. “At the beginning of 2021 we were looking at homes. We wanted a stand-alone home, we wanted the pool.

“But we just got humbled very quickly because the house prices sky-rocketed. Right at the start of the year you could still get a stand-alone house in Carrara for under $500,000. Fast-forward to where we were at the end of last year and were only able to get a townhouse for under $500,000. It escalated very quickly.”

Ms Blom said prices meant a new build was not a realistic option for the family, meaning the Queensland first-home owner grant was not something they considered applying for.

“It (building a new home) was definitely a good idea a couple of years ago, but now, no way,” she said.

But they did avail of the federal first-home guarantee, which allows eligible buyers to purchase a home with as little as five per cent deposit without paying lenders mortgage insurance.

Mortgage broker Carolyn Sutherland, of Paradise Home Loans, who assisted the family in buying their first home, said the scheme meant there were still options for first-home buyers on the Gold Coast.

“I don’t believe in doom and gloom, there’s never been a better time for a first-home buyer to get into the market, with that particular grant from the federal government.

“.. From a broker’s point of view and a mother’s point of view, you’ve just got to get in the market.

“You can never afford to buy where you want to live. Everyone wants the same house they grew up in, which mum and dad have been paying off for 30 years. They’re not going to get that.

“But they need to get into the market, even if it’s a unit, a townhouse or a duplex.

“... There are places out there.”

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Originally published as First home buyers Gold Coast: Dramatic drop in number using state government grants