First-homeowner grant starts to bite

The Federal Government’s $14,000 first-home owners grant appears to have reignited the depressed building sector with new-home sales reaching a record in March, according to a survey by the Housing Industry Association. It revealed that first home buyers accounted for 60 per cent of 16,700 homes bought during the month.

The Australian Financial Review reports the March figure was up 135 per cent on the figure for February and also surpassed the previous record of 12,500 contracts achived in one month. The HIA said the March activity was in excess of expectations with sales being 44 per cent higher than the total deals recorded in the same period last year.

The biggest increase was recorded in Queensland where March sales were up by 155 per cent on the February figure. New home sales increased 140 per cent in WA, 106 per cent in Vic, and 94 per cent in NSW.

BankChoice advises that buyers looking to use the grant to purchase their first home need to be wary of using it to fund their deposit in order to secure a home loan. read more