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Grant debate delays starts

BUILDING industry groups, fighting to increase the first home buyers grant for new home purchases, have put a further damper on sales as many potential buyers waited to see if the grant was increased.

Both the Master Builders Association and the Housing Industry Association were pushing for an $8,000 increase in the $7,000 assistance grant to first home buyers hit by an increase in prices resulting from GST.

Speculation of a grant increase was stopped late last year when the Treasurer Peter Costello made it clear that the grant would not be increased.

According to HomeStart general manager Ian Anthem, the effect of the publicity had been far reaching.

HomeStart, part of the J-Corp Group, had many potential clients who put off their purchase in the hope that the grant would increase.

Mr Anthem said that on the day when the issue was first publicised in October, eight people cancelled their appointment with HomeStart.

“Our research has shown that the promise of additional funding has been a very common reason for buyers to delay their purchasing decision,” he said.

Mr Anthem said while he agreed with the HIA’s push for an increase in the Grant, it was to everyone’s advantage that the situation had been clarified.

“It is unfortunate that first home buyers have postponed making a decision based on the anticipated extra $8,000 which didn’t eventuate,” Mr Anthem said.

Master Builders Association director Michael McLean said it was certainly plausible that first home buyers have held off because of the uncertainty created when the industry sought an increase in the grant.

Mr Anthem said indications were already emerging that interest was already starting to pick up among consumers. He is confident that conditions will improve – so much so that he is advertising for four new sales positions.

J-Corp, WA’s second largest residential builder, behind only the Dale Alcock Group, has watched its orders plummet over the past year.

In November, J-Corp received only 67 orders compared with 172 orders a year earlier, bringing turnover down to $7.3 million compared with $17.3 million for November 1999.

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