First Home Bonus Boosts Market ... a Bit

12 Jun 2012 - Simon Johanson from http://news.domain.com.au from

Bank worker Heath Penbrook and first-year nurse Samantha Lay are just two of many first home buyers braving the property slump to beat the cutoff date for the state's lucrative bonus scheme.

Victoria's new home handouts - up to $19,500 for eligible buyers - end this month, but the federally funded $7000 first home grant will remain.

Mr Penbrook, 24, had no plans to buy a home this year but decided to act two weeks ago after his brother told him he would miss out on $26,500 in government incentives.

Five days later, he had signed a $108,000 deal for a block of land at The Range estate in Bendigo and chosen a $172,000 three-bedroom Metricon home. ''It's going to be really financially tight in the time before I'm living there. Once I'm in it, I should be OK,'' Mr Penbrook said.

For 22-year-old Ms Lay, support from her parents was the key to a contract for a $610,000 house and land package at Mirvac's Harcrest estate in Wantirna South.

''It's a good opportunity. I've got my parents to help me, to back me up,'' Ms Lay said.

Both are buying into a falling property market. Values slumped in Melbourne by 2.8 per cent in May, the worst one-month drop since the global financial crisis, according to property analysts RP Data.

Estate agents specialising in outer Melbourne house and land sales say first home buyers accounted for about 76 per cent of sales last month, up from 55 per cent in April. ''This month, three in every four are first home buyers. If you look at the long-run trend, it's generally around 47 per cent,'' Oliver Hume Real Estate's Andrew Perkins said.

But while the number applying for grants has risen since January, far fewer are taking advantage of handouts this year than did during 2010 property market boom, State Revenue Office figures show.

The end of the scheme was likely to ''draw forward'' an increase in first home buyers, said AMP Capital Investors chief economist Shane Oliver. That will have a ''dampening effect'' later this year, Mr Oliver said. ''It could look quite soft for a while and that will probably show up in employment and retail sales in Victoria over the next year.''