An aerial shot of the inner-city Perth suburb of Mount Hawthorn

‘These grants were quite substantial’: RBA says prime homebuyer and building grants have pushed home prices up

Government grants, such as first homebuyer grants and HomeBuilder, have increased demand for homes and helped drive home prices up, with “pervasive” impacts on housing outcomes for some Australians, the Reserve Bank said.

“Whether it’s time-limited subsidies that drive up demand and prices, or the trade-off between low yields globally and rental yields locally, policies can have far-reaching implications for housing outcomes.”

Speaking at the UDIA National Congress Sydney on Wednesday, Ms Ellis said HomeBuilder and other grants have increased the number of first-time homebuyers for a period of time during the pandemic.

“On the fringe, this reduced the number of people who wanted to rent,” she said.

“At least some of the people who have moved from a shared home to live with their partner would have done so in a newly purchased home.”

RBA Assistant Governor Luci Ellis says HomeBuilder and other grants have increased the number of buyers during the pandemic.ABC News: Michael Barnett

She noted that the solid home building rates over the past two years were due to very low interest rates and government subsidies, such as the “raft of subsidies and other incentives for housing construction, as well as support for first-time homebuyers during the pandemic.” .

While it has been difficult to unravel how much of the increase in housing demand was due to temporary subsidies and the current low level of mortgage rates versus the shift in preferences for people to live in their own homes, she noted that government subsidies caused a big wave.

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