First home buyer grants can push up prices: Productivity Commission

The Productivity Commission says stamp duty concessions and first home buyer grants, on which state and territory governments last year alone spent $2.7 billion, can push up dwelling prices and should be wound back because they take away money needed to prevent people falling into homelessness. The independent agency did not definitively say the subsidies – estimated to have more than doubled from $1.2 billion over the four years to 2020 – push up dwelling prices, as many economists assert. But it declared the risks of doing so gave “reason to be sceptical” that such measures made ownership more accessible or affordable. In any event, the public benefit would be much greater if some or all of that money – much of it going to people who would buy a dwelling sooner or later anyway – were spent on assistance for people who were homeless or at risk of becoming homeless, the report says. “You see the evidence of high unmet demand and homelessness services, and demand and social housing, and then you go to the other end of the scale and say, well, home ownership – is it a good return on that $2.7 billion investment?” commissioner Malcolm Roberts told The Australian Financial Review. “We would say that the private benefits are greater than the public benefits from home ownership. We think there’s an opportunity to tighten up what’s being done with home ownership support.” Last year, stamp duty concessions and exemptions to first home buyers totalled $2 billion, up from $1.6 billion in

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