The Queensland government last month doubled its first homeowners grant until June 2025.
In doing so, it increased the first homeowner grant from $15,000 to $30,000 for any new properties up to a value of $750,000.
That’s a huge incentive for first home buyers, who make up roughly 25 per cent of the market.
It will increase the number of houses being built across the State of Queensland which is important in the context of the housing crisis.
It will also increase house prices.
The last time Queensland increased its first homeowners grant, through 2009 and 2010, the median house price in Brisbane increased by 10 per cent per annum. First home buyer activity across that period increased by nearly 50 per cent.
When the Federal Government ran its Homebuilder incentive, through 2020 and 2021, the median house price increased in Brisbane by 30 per cent. First home buyer activity across that period nearly doubled.
It makes sense if you think about it.
An extra $15,000 in the first homeowner grant equates to at least $75,000 in extra buying power; reason being is that the first homeowner grant counts toward the 20 per cent deposit ($15,000 divided by 20 per cent equals $75,000).
Eligible first home buyers have an extra 10 per cent in their budget.
It also equates to just under 10 per cent of the median dwelling value across Brisbane ($779,270).
Despite the upward pressure it may have on prices, it was the only option available to try and get the crisis under control during a period of record population growth through overseas migration while vacancy rates remain at record lows.
Supply is nowhere near where it needs to be to keep up, so why not lean on the first home buyers to do some of the heavy lifting in building much needed housing supply?
I like the idea.
In fact, I think they should be encouraging mum and dad investors to do the same. Although, I’m not sure the Queensland Government would be brave enough going into an election year.
In any event, it is surely only a matter of time before every other State Government follows the Queensland lead and increases their first homeowner grants, too.
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