Housing finance supports greater stamp duty relief for first home buyers

“Master Builders welcomes the findings of the latest housing finance statistics, which shows total dwelling finance increased by 0.4 per cent in December 2016, supported by a 1.3 per cent increase in owner occupied loans, offsetting a fall in investor loans of 1 per cent,” Matthew Pollock, Master Builders National Manager – Housing said.

“The recent housing finance data supports Master Builder’s expectation nationally for another year of strong positive growth in housing construction, driven by a record for apartment construction in NSW and Victoria particularly. However, prospects will likely be more varied across other housing markets, particularly in resources states,” he said.

“The fall in investor loans is a reversal in an upward trend in investor loans that has extended since September 2016 and is early evidence that loan restrictions by the Australian Prudential Regulatory Authority (APRA) and the major commercial banks are beginning to taper investor interest in the housing market,” Matthew Pollock said.

“First home buyer challenges continue with loans down by 7.1 per cent in month, and is down by 2 per cent over the year to December 2016. More needs to be done to improve first home buyers access to the housing market, but changes to negative gearing is not one of the solutions,” he said.

“There are no easy solutions, but in the short term, stamp duty relief for first home buyers for all types of housing, is the most obvious policy solution. Stamp duties can be equivalent to 10 to 20 per cent of the deposit required in most states/territories,” Matthew Pollock said.

“The housing data shows that the states that provide greater stamp duty relief for first home buyers also have a much greater share of first home buyers in the market,” Matthew Pollock said.