GST ignorance causes panic

Ignorance about the impact of the GST in the housing market is causing unnecessary panic amongst first home buyers according to the Western Australian Housing Centre, general manager, Anthony Kinder.

Mr Kinder believes this panic is leading to a surge in new home building activity in WA with 20,506 new dwellings approved in the State during the past financial year.

“This was an 11 per cent increase on the previous financial year and the highest increase of any State in Australia,” Mr Kinder said.

According to the June quarter survey of the WA housing market by the Real Estate Institute of WA, the growth in the housing market was also evident in strong sales of established houses.

REIWA president, Neville Fox said; “In the Perth metropolitan area there were 10,175 sales of established homes in the June quarter of 1999, which is 12.7 per cent up on the previous quarter.

Mr Fox said the busiest sector of the real estate market was the sale of new blocks of land, particularly in the outer suburbs.

Like Mr Kinder, Fox believes the looming GST, a strong economy and low interest rates are driving the housing boom.

According to Mr Kinder the government needs to undertake a information campaign to combat the panic buying.

“First home buyers are driving this surge in the new home building market in an attempt to build a home before the introduction of the GST next year.

“The reality is that this panic is unnecessary since first home buyers will receive a $7,000 compensation package if they build a home after the GST is introduced.

“This means the affordability for first home buyers will virtually remain unchanged because of expected higher disposable income and the compensation package.

“Panic buying is based on ignorance and it is clear that if the first home buyers had more information they would be more relaxed about building a home,” Mr Kinder said.

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