David Bradbury (Lindsay, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Housing and Minister for the Status of Women. Would the minister explain what the government is doing to boost confidence in the housing market?

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Housing) Share this | Link to this | Hansard source

I want to thank the member for Lindsay for his question. He obviously has a lot of young families in his electorate and he also has a lot of land that is ready to be built on. This measure will restore a lot of confidence in the housing market and hopefully see some new homes put on that land.

I am very pleased to report that the Prime Minister and the Treasurer today announced a $1.5 billion boost to confidence in the housing market in Australia. First home buyers who are purchasing newly constructed properties will see the value of the First Home Owner Grant triple from $7,000 to $21,000 for newly constructed homes. It is a very significant new investment. People who are purchasing existing homes will see the value of their First Home Owner Grant double from $7,000 to $14,000. These increased payments are effective immediately and will be available on all contracts entered into between now and 30 June 2009.

While our housing market has not seen the turbulence of overseas markets, lending finance for owner-occupied housing did fall by 2.1 per cent in August against July and the number of dwelling units approved in August fell by 3.7 per cent against July, seasonally adjusted. This boost will increase confidence in the housing market coming particularly on top of the one per cent cut in interest rates. It will give significant extra assistance to young people, families and individuals thinking about entering the housing market. I think many of them will find that they bring forward their decision to purchase because of these extra measures. Encouraging new building is also particularly important in current economic circumstances.

We have seen a number of housing industry associations welcome this move very enthusiastically. The Housing Industry Association expects the initiative announced today to provide a boost of 15,000 in the production of new dwellings. Dr Ron Silberberg said:

This measure will provide an immediate stimulus for new housing and help restore business confidence across the sector particularly in the building product manufacturing sector.

From the Master Builders Association of Australia, Wilhelm Harnisch, the CEO, said:

The tripling of the first homeowners grant for new homes will boost confidence …

He went on to say:

Kick starting the housing sector is a proven success formula for stimulating economic growth because of the multiplier effects it has on the broader economy in terms of providing jobs as well as stimulating the manufacturing and retail sectors.

From the Residential Development Council, the executive director, Caryn Kakas, said:

The tripling of the grant to $21,000 will get builders building again.

She went on to say:

There has never been a better time to introduce this cash injection.

The statement went on to say:

Ms Kakas believes directing the first home owners grant at first home buyers buying new homes will not only help fix our critical shortage of housing but also provide a much needed boost to the economy.

This new measure is very important, it is great for first home buyers and it is great for the economy.