Call To Double First Home Owners Grants

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TASMANIA'S first home owner grant should be doubled to $14,000 to boost the state's sluggish economy, real-estate advocates say.

Real Estate Institute of Tasmania president Adrian Kelly says upping the grant even if only for 60 days would have a huge impact on boosting the ailing real-estate industry and the wider economy.

The incentive would help first-home buyers enter the real-estate market, create work within the building industry, and have a flow-on effect for small businesses right across the state.

It would also offer much-needed relief within the overcrowded rental market, as people moved out of rental accommodation and into their own homes.

Mr Kelly said there were plenty of prospective young buyers and an extra $7000 would be just the incentive they needed.

He said the extra funds would help buyers secure an existing house at the state's median price of $350,000 or build with a house and land package.

Meanwhile, buyers looking at properties under $200,000 perhaps in Hobart's northern suburbs could use $14,000 to make a sizeable dent in their new mortgage.

Mr Kelly said an influx of first-home buyers would have a ripple effect, prompting existing homeowners to upgrade to newer and more expensive homes.

"We need first-home buyers because they push the second and third-home buyers up," Mr Kelly said.

There were 18,000 house sales in Tasmania in 2003 but this has fallen dramatically, with annual figures now down to about 11,500.

The number of new-home starts has also fallen and properties are staying on the market for longer, with many people choosing to renovate existing homes rather than buy a new home.

Mr Kelly said the Government might be strapped for cash but boosting the first home owner's grant, even for a short period, would produce big results for a relatively small financial outlay.

Housing Industry Association of Tasmania executive director Stuart Clues said when the grant for building in Tasmania was tripled to $21,000 almost four years ago, it provided an immediate boost to the economy.

He said doubling the grant for 60 days would be a great start but six months would be better.

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