Call to increase First Home Owner grant from $15,000 to at least $25,000

As house prices continue to soar, a peak residential building body has called for government intervention to get people on the property ladder. Take our poll here.

South Australia’s First Home Owner Grant should be increased from $15,000 to at least $25,000 to account for skyrocketing house prices, a peak residential building industry body says.

The Housing Industry Association (HIA) said the current payment does not go far enough to help bridge the gap for those struggling to save a deposit.

The amount was raised from $7000 to $15,000 in 2012, which at the time was equivalent to 3.8 per cent of the median detached house price.

Sustained price increases have meant the grant is now equivalent to only 1.9 per cent of the median price, according to HIA SA executive director Stephen Knight.

In its 2024-25 state budget submission, HIA called on the government to adjust the grant to a level equivalent to the benefit it offered in 2012.

“The grant has been for decades a great help for getting young people into home ownership and has often been what has made it possible,” he said.

“What has stood in the way for many has been the inability to save the deposit and this has been where the grant has stepped in and bridged the gap.

“The grant has been particularly successful in SA where, in the past, our relatively affordable housing has meant that even with a modest income, with the help of the grant to put together a deposit, home ownership was possible.”

Housing Industry of Australia SA executive director Stephen Knight. Picture: Supplied

Treasurer Stephen Mullighan. Picture: NCA NewsWire/Kelly Barnes

Mr Knight said soaring house prices had made it “almost impossible” to break into the housing market.

“No matter how hard they try to put together the deposit it, the dollars needed just gets further and further away,” he said.

“Average home prices in SA have risen more than $85,000 in just the past year so $15,000 just doesn’t cut it anymore – the grant needs to be at least $25,000-$30,000 just to retain parity to what the real benefit was in the past.

“The current generation deserve to be supported into home ownership to the same level as those were in the past.”

Mr Knight said the government should also consider raising the eligibility threshold from the current $650,000 cap to the median house price level of $750,000.

Treasurer Stephen Mullighan said the last state budget included “the biggest boost for first home buyers for decades”, which included abolition of stamp duty for first homebuyers building or buying a new home, saving them up to $29,580.

“These first home buyers can still claim the first home buyers grant of $15,000, increasing the value of these measures to nearly $45,000 for eligible home buyers,” he said.

“We have also introduced low deposit loans through Homestart, with deposits of as low as only two per cent required for eligible buyers, with no lender’s mortgage insurance required – a further saving of tens of thousands of dollars for first homebuyers.

“Any measures to be included in the state budget will be disclosed at the release of the budget in June this year.”

The state budget will be delivered on June 6.

Originally published as Call to increase First Home Owner grant from $15,000 to at least $25,000