15/04/2009 - 22:00

Builders see merit in home grant extension

15/04/2009 - 22:00

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THE state's second largest residential builder has called on the federal government to extend the boost to the first homeowners grant until the end of the year and extend the grant to second and third homeowners to stimulate the industry.

THE state's second largest residential builder has called on the federal government to extend the boost to the first homeowners grant until the end of the year and extend the grant to second and third homeowners to stimulate the industry.

Alcock Brown-Neaves Group managing director Dale Alcock told WA Business News the general view among industry was that the boost to the first homeowners grant, taking it to $21,000, for a new build had stimulated activity at that end of the market.

But, Mr Alcock said, while the bottom end was buoyant, the middle and upper end had slowed since the global financial crisis had hit the economy.

"The middle end is slowing and at the upper end, there's a lot enquiry but difficulty to entice those people over the line, so they're looking for a signal," Mr Alcock told the forum.

"My hope is that the government extends [the boost] to the end of December, but that they maybe apply a $14,000 boost to second and third home owners; in other words a new build, should get a boost.

"I think that might be something that just might turnover some middle and upper end activity, which is lacking at the moment."

The call comes after research by the Urban Development Institute of Australia Western Australia suggested the grant boost needed to remain in place for 18 months in order to effectively stimulate the market for the long term.

UDIA WA chief executive Debra Goostrey said that, if continued, the boost would have a flow-on effect to the established housing market and help stabilise the property market.

The boost for first homeowners has effectively stimulated that end of the market, with the latest UDIA land snapshot figures for WA showing 188 sales recorded for the week ending March 27.

The land snapshot has averaged around 134 lots per week this year, compared with an average 65 lots per week in the few months leading up to the announcement of the boost last October.

Research suggest that previous first homeowners grant boosts have taken about two years to achieve the flow-on effect of stimulating the wider housing market.

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