First home buyers in Victoria will have to save up to $19,500 more this year, as the first-home bonus for new builds gets canned after June 30.
While the $7,000 national grant is still available to Victorian first home buyers, the $13,000 assistance for new inner city houses, and $19,500 for new regional properties, will be stopped at the end of next month.
The decision not to roll the grant over into the next financial year comes on the back of the Baillieu government’s plans to keep the budget in surplus.
Stamp duty cuts will be coming into effect later in the year to assist all first home buyers instead, according to treasurer Kim Wells.
These cuts will reduce stamp duty from 30 to 20 per cent for first time buyers from the start of 2013, for properties under $600,000.
However, Australian Property Monitors' senior economist Andrew Wilson told Smart Property Investment that investors should not expect it to cause a big change in the market straight away.
"I don’t think it will have any effect in the shorter or medium term, the Melbourne market certainly has some headwinds that it has to address this year, and we will expect the Melbourne market to continue to move sideways for most of 2012," Mr Wilson said.
"I don’t think that taking away the bonus for new homes is going to have a significant impact. It will most likely be flat regardless."
Mr Wilson said that the State Government has been looking towards more effective ways of assisting first home buyers to gain access to the market, explaining that there has been 'vigorous debate' around the benefits of bonuses and handouts.
"Often the question is whether in fact [the bonuses and grants] just add a price or a cost, in terms of increased prices for first home buyers, rather than improving their access to the market place," he said.