south australia's looking good!

[singingtheblues]

Just announced ... I dont know any more detail but it's worth checking out - on first glance it looks like everyone will get a grant!

(cant help thinking that it'll just feed into increased prices myself - however i'm not complaining!!)

From abc.net.au

"Changes to housing grants in South Australia will let everyone building or buying a new home get State Government assistance.

Measures had been urged by the construction industry in recent weeks to help combat a downturn in housing activity.

SA Premier Jay Weatherill said a Housing Construction Grant was now on offer for everyone building a new home.

"This new grant and reforms to the existing first home owner scheme will provide an urgent boost to the state's housing construction industry and help stimulate the property sector," he said.

"The number of new dwellings built in SA declined by 18 per cent in the last financial year."

The current First Home Owners Grant is being cut from $7,000 to $5,000 and is to end in the middle of 2014.

The Government said together with its state budget announcement of stamp duty concessions for off-the-plan apartments in the city and near-city precinct, eligible first home buyers might be able to get up to $39,830 in State Government assistance.

Nathan Paine of the Property Council said the changes would be welcomed by many South Australians.

Legislation to cover the changes is about to go to State Parliament but the Government promised an ex-gratia scheme would be in place immediately.



Grants on offer

. First Home Buyers: off-the-plan apartments in city (until June 30, 2013)
First Home Owners Grant $15,000 (For property valued up to $575,000)
Housing Construction Grant $8500 (For property valued up to $400,000)
Stamp Duty savings $16,330 (Off-the-plan apartment valued at $400,000)
Maximum total assistance $39,830

. Any person who buys off-the-plan apartment in the city (until June 30, 2013)
Housing Construction Grant $8500 (For property valued up to $400,000)
Stamp Duty savings $16,330 (For off-the-plan apartment valued at $400,000)
Maximum total assistance $24,830

. First Home Buyers who build or buy a new home (until June 30, 2013)
First Home Owners Grant $15,000 (For property valued up to $575,000)
Housing Construction Grant $8500 (For property valued up to $400,000)
Maximum total assistance $23,500

. Any person who builds or buys a new home (until June 30, 2013)
Housing Construction Grant $8500 (For property valued up to $400,000)
Maximum total assistance $8500

. First Home Buyers of an established home (until June 30, 2014)
First Home Owners Grant $5000 (For property valued up to $575,000)
Maximum total assistance $5000

 

[jim1964]

Well..........we will have to carefully monitor this one.SA Government is usually full of P&%% and Wind.Hopefully though,it may put a bit of a spark back into the housing sector.Fingers crossed....Double.

 

[NPS13]

Interesting, worth following.

 

[hobo-jo]

It might boost the prices of new builds short term, but seems likely it will reduce pressure in the lower end established market (where FHBs would be most concentrated).

This follows similar moves in QLD & NSW.

The move might bail out developers and the construction industry, but it's not good for existing home owners who want to sell (in order to upgrade or those who are struggling with repayments, etc).

FHBs might only be a small percentage of the property market (usually around 10-20%), but they are the great enabler for those in the lower end market who want to upgrade...

There's already an abundance of stock on market:
http://www.sqmresearch.com.au/graph_stock_on_market.php?region=sa::Adelaide&type=c&t=1

Unless a majority of that is new builds just waiting for an incentive to bring buyers into the market then it seems a lot more likely this scheme will be negative for prices.

Why buy stale established stock when government will provide free money to buy brand new?

 

[irawin]

Looks like pushing the apartment living in the city!

 

[Ed Barton]

http://www.revenuesa.sa.gov.au/fhog/index.html

 

[Jake Milne]

http://www.rebonline.com.au/breaking-news/5594-signs-of-life-in-otherwise-flat-sa-property-market

 

[Corey Batt]

This will be interesting. I've already had two enquiries today from FHB's looking to build now because of the grant changes. Rustling the buyers out of the bushes it seems.

 

[pully]

http://www.adelaidenow.com.au/news/...mon-oneill-warns/story-e6frea83-1226497247750
it seems things are pretty dire?

good luck to those who can benefit from the incentives, but things are not too rosy at present.

 

[Truly Exotic]

This will be interesting. I've already had two enquiries today from FHB's looking to build now because of the grant changes. Rustling the buyers out of the bushes it seems.

but they are also cutting/reducing the FHOG for existing dwellings, so thats also going to negatively counter this as well!

 

[Corey Batt]

but they are also cutting/reducing the FHOG for existing dwellings, so thats also going to negatively counter this as well!

That is true. I think this will put a little bit of strain in selling FHB properties, e.g 4-10 yr old properties around Munno Para, Andrews Farm, or even in areas such as Paralowie. I personally haven't came across anyone who has bought in the Elizabeth, Davoren Park region who weren't investors so I don't think you'll see a large drop off there due to the 2k decrease.

I think a lot of land will be snapped up around Munno Para, Playford Alive, Blakes Crossing until the EOFY. Young FHB's wanting there own little Mc Modest Mansion. Same thing happened during the GFC Boost.

 

[mattnz]

I think this is going to cause crazy anomalies in valuations on completion in the suburbs you mentioned. 2 year old houses will drop in value, while newbuilds jump higher.... then the valuer assesses the newbuilds against the existing resales. Can imagine huge issues for many at settlement!

 

[Corey Batt]

I think this is going to cause crazy anomalies in valuations on completion in the suburbs you mentioned. 2 year old houses will drop in value, while newbuilds jump higher.... then the valuer assesses the newbuilds against the existing resales. Can imagine huge issues for many at settlement!

You betcha.

I also wouldn't be surprised if you see some blocks go from 100k to 120k in short time if take up is strong.

...And drop straight back down to 100k when the dust settles.

 

[eKwatee]

I don't think Adelaide would have had a building company left in 2 years should the state government not had introduced this construction grant. Let's hope the greedy builders put a little away this time for when times are tough again and not depend on the State Government for the next free feed. Although saying this, once this grant has expired we will be under a Liberal Federal Government and things would have returned to normal.

 

[Logica]

It might boost the prices of new builds short term, but seems likely it will reduce pressure in the lower end established market ....
...Unless a majority of that is new builds just waiting for an incentive to bring buyers into the market then it seems a lot more likely this scheme will be negative for prices. Why buy stale established stock when government will provide free money to buy brand new?

Hmmm.... tend to agree with hobo-jo. It may impact negatively on values of established houses in areas close to where all the new construction is going to take off. But the rents on established properties will probably be unaffected so the yields will go up in Morpett Vale etc ??

Another thing is that it is likely that the project builders will quickly increase the prices hehe... same with land. Any thoughts??

 

[Indifference]

Wow... short term gain for long term pain....

This is yet another example of government intervening in the markets. They are essentially bringing forward demand by offering incentives to buy now and I assume they are "hoping" that the economy lifts in the next few years so that the subsequent increase in housing demand will fill the void they have created by bringing demand forward.

I get nervous every time a government does this sort of thing. It does not necessarily fix the underlying issues but rather is a temporary "band aid" backed by optimistic forecasts for the future.

Good luck to those that can benefit and too bad for those that will be in mortgage stress in 2 years time by being swayed into a financial decision they just aren't prepared for.