Boost to Queensland first home owners grant welcomed

BOQ shares views on doubling of grant

Boost to Queensland first home owners grant welcomed

The Queensland government’s doubling of the value of its First Home Owner Grant to $30,000 at the end of last year has been welcomed by one of the state’s leading lenders, which is keen to grow this segment of the market.

James Sheffield (pictured above), Bank of Queensland head of home loans, said it was hard to gauge the success of the grant and its take-up rate.

“The grant was introduced in November 2023 so it’s hard to tell whether there has been an increase in flows given there is a generally a seasonal slowdown through December,” Sheffield said.

“While it is trending up, we would need to monitor over a longer period to confirm a consistent trend.”

BOQ sees more growth in first home buyer sector

The Queensland first home owner grant (FHOG) applies to contracts signed between November 20, 2023, and June 30, 2025.

To qualify for the grant, you must be purchasing or building a new home valued at no more than $750,000 (inclusive of land and any contract variations) and those applying for the FHOG must be at least 18 years old, and it must be the first time they have owned a residential property in Australia.

Sheffield said first home buyers were valuable customers for BOQ.

“We see an opportunity for further growth in this segment,” Sheffield said. “Our commitment to this segment is demonstrated through the various solutions we’ve introduced including family guarantees, family assistance for loans with LMI and a $2,000 first home buyer cashback for loans with LMI.”

“Increasing the price cap of the grant would help more customers, particularly in the current market where prices are at peak levels in some areas of Queensland e.g. southeast Queensland.”

Sheffield said the buoyancy of the property market, coupled with high interest rates and higher cost of living, meant first home buyers needed as much as help as possible and “government grants can go a long way with helping with upfront costs”.

When the increase in the grant amount was announced at the end of last year, the then Queensland premier Annastacia Palaszczuk said it was a way for the government to show its support for first home buyers.

FHOG to help 12,000 first home buyers

The Queensland government estimated its doubling of the grant would support around 12,000 buyers to purchase their first home.

At the time the grant increase was announced, Palaszczuk said she wanted to see homeownership rates continue to rise.

“The existing first home owner grant has been very successful, which is why our government is doubling the grant program – meaning eligible first home buyers will receive $30,000 cashback,” Palaszczuk said. “I hope this puts the dream of owning a first home within reach of more Queenslanders.”

The grant increase means Queenslanders will have access to a grant that triples those available in NSW and Victoria.

First Home Owner Grant criticised for price gap

The grant has been panned by some brokers, who told MPA sister publication Australian Broker the incentive didn’t address concerns over the property price cap which they said needed realigning with today’s property market.

There will be many first home owners who will also be crossing their fingers that interest rate rises don’t continue along the cash rate rise path the country has endured over the past 18 months.

However, with job vacancies and inflation trending down, consumer sentiment is set to improve in 2024 said Bank of Queensland chief economist Peter Munckton who recently told MPA that talk of rate increases by the RBA is now “in the rear mirror”.

In August last year, BOQ appointed Patrick Allaway as its managing director and CEO.

Do you think the Queensland first home loan grant will assist buyers to secure their first home? Comment below