Property Market Information: First home owners could benefit from REIA proposals

By the resi financial blog team, 13 February 2014

REIA First home buyer approvals

It's old news that first home buyer numbers have been dwindling over the last few months, with a wide range of factors being blamed - including a dwindling supply of homes, changes to the First Home Owners Grant (FHOG) and difficulty in beating out the increasing tide of investors entering the market. 

However, ahead of the Australian government's 2014/15 Budget announcement, the Real Estate Industry of Australia (REIA) has submitted 10 proposals they believe could help the returning strength of the nation's property market, including a number of entries based specifically around encouraging the growth of first home buyers across the country. 

REIA President Peter Bushby said stemming the rapid decline of first home buyers and focusing on increasing housing affordability were two of the biggest issues facing the industry, which need to be addressed as soon as possible. 

One of the biggest proposals was to allow first home buyers to access their superannuation funds in order to help them purchase property. At the moment, self managed superannuation funds can only be used for property investment with the goal of supporting the individual's retirement. 

Furthermore, to be eligible for the tax concessions afforded to these investments, the investor needs to pass the sole purpose test. This basically means the owner isn't able to occupy the property, nor can any family or acquaintances of the owner. 

This change would make a big difference to the funding of property for first home buyers, giving them access to a great source of initial wealth in order to purchase a home. 

Another proposal put forth by the REIA was annual reviews of the nation's FHOG's. This would help to keep them relative to the general movements of the market, making them far more useful for first home buyers looking for more support of their real estate goals.

Categories: First home buyer