First Home Buyers Wave to Subside

FIRST home buyers have drastically increased their representation in Launceston's real estate landscape over the past year, but that is set to change as the Federal Government's First Home Buyer Grant is wound back.
Between October 1 and December 31, first home buyers will get $10,500 for buying an established home and $14,000 for buying or building a new home.

They had been receiving up to $21,000 for buying and building a new home and up to $14,000 for buying an existing home - as a result of a stimulus package "boost".

From January 1, the grant will go back to its original format of $7000 for all first home buyers.

The number of first home buyers in Launceston peaked in May, with those buyers representing a record 43.1 per cent of all real estate transactions. Last month they accounted for 31.1 per cent.

Real Estate Institute of Tasmania president Peter Bushby said the reduction in grant money would equate to a reduction in first home buyer transactions.
Source; launceston Times (Examiner)

"We will see it return to the typical rate where it fluctuates between 16 per cent and 20 per cent," Mr Bushby said.

As a result, Mr Bushby said the city's median house price was set to rise because there would be fewer houses sold in the cheaper price bracket favoured by first home buyers. Mr Bushby said he did not believe house prices would be reduced in line with the grant reduction.

"We haven't seen a massive increase in prices as a result of the boost," Mr Bushby said.

"It has enabled the market to tick over at a time when it could have been slower."

Launceston's median house price is $265,000, a 5.6 per cent increase for the year but down 1.9 per cent from last month.