Home grant changes more than give

Daniel Emerson and Liam Croy

The 75 per cent of first-homebuyers who historically put their Government assistance towards an established home will see their leg-up slashed by $4000 under a push to stimulate construction.

The Government yesterday split the $7000 first-homebuyer's grant into two tiers in a move expected to save it $24 million this year.

From September 15, pending the passage of legislation, the grant will be cut to $3000 for first-homebuyers buying an existing home and boosted to $10,000 for people planning to get a new house.

Treasurer Troy Buswell said the Government decided to use its "finite resources on stimulating growth in the supply of housing", but correctly predicted it would split industry groups.

Master Builders Association president Michael McLean welcomed the incentive to build, saying the housing sector had been "in the doldrums for a few years".

"Given our increasing population we need to boost our housing stock," he said.

"You also need to take into account our unemployment levels are rising. If we can channel them into the construction industry, it will help people avoid unemployment."

But Real Estate Institute of WA president David Airey said most first-homebuyers bought established homes and would be disappointed. He questioned whether the construction sector needed the boost.

"In the last quarter, first-homebuyer grants for construction increased 19 per cent and 56 per cent over the last year, so I don't know why we need to stimulate artificially the construction sector," he said.

Garreth Young, who bought an established home in Marangaroo on Wednesday, was relieved to get the full $7000 before the changes.

"It was really important," he said. "I've been budgeting and saving for some time and knowing that money was there was a big help."

Mr Young, 25, said the grant should have been left alone.

"There are a lot of people banking on that grant," he said.

"Unless you want to go extremely far north or south, it's very limited where you can build."