REIA Wants First Home Buyers’ Assistance to Include Superannuation Funded Deposits

The REIA has appealed to the government to help struggling first home buyers

Current renters or those thinking about their first home purchase would likely welcome the REIA’s submission for the 2014/15 Federal Budget.

The submission includes proposals to reform government assistance for first home buyers in areas concerning how to accumulate a deposit, the size of grants and the type of housing eligible for assistance. 

The Real Estate Institute of Australia (REIA) is the national professional association for real estate agents in Australia and represents around 75 per cent real estate agencies. It is an important voice for the broader property and construction sector. 

Superannuation Can Help to Overcome Challenges with Saving a Deposit

REIA’s pre-budget submission focuses on national housing affordability and how to help first home buyers in Australia get onto the housing ladder. 

One of REIA’s proposals is that first home buyers should be allowed access to their superannuation to fund the deposit to buy their home, especially as rising prices mean that first home buyers need to save a bigger deposit over a longer period in order to secure a mortgage.

“No doubt many are eagerly anticipating the government’s response to these proposals.”

In a Mortgage Choice survey conducted in 2013, 31.8 per cent of respondents said they need to rent longer than desired to save for the required larger deposit.

Data from AHURI, the Australian Housing and Urban Research Institute, also showed a significant jump in the proportion of long-term renters from 27 per cent in 1994 to 33.4 per cent in 2013.

Government Grants for First Home Buyers Should Include Established Homes

Another idea put forward by REIA is to reintroduce a government grant for first home buyers on established housing.

South Australia, Western Australia and Tasmania are the only states that currently have assistance for first home buyers purchasing established housing. Other states/territories only provide assistance to those purchasing new homes.

“REIA’s pre-budget submission focuses on national housing affordability and how to help first home buyers in Australia.”

More first home buyers will be able to take advantage of the grant if established dwellings become eligible for assistance, given 81.4 per cent of Australian first home buyers with a mortgage were buying established rather than new homes, according to the 2011-12 ABS housing data.  

Size of Government Grants for First Home Buyers Should Reflect Price Movements

The third area tackled by REIA concerns the size of the government grant for first home buyers. 

REIA proposes that the grant should be set at $15,000 for all housing and it should be reviewed annually to ensure it keeps pace with house price movements.

No doubt many are eagerly anticipating the government’s response to these proposals.  We will have to have to wait until the middle of May to find out however, as this is when the Federal Budget will likely be handed down.

If you would like to find out more about government assistance for first home buyers, a useful starting point can be found on the First Home website.