First home buyer grants should be limited to the building of new homes to maximise the employment potential of the taxpayer grants, the Urban Development Institute of Australia said today.

The peak property industry body also called for Reserve Bank to cut interest rates on Tuesday and spark an urgently needed broad recovery and confidence in the property market to maintain and protect thousands of jobs.

Executive Director of the UDIA (VIC) Tony De Domenico said, "The property industry in Victoria directly employs around 310,000 full time employees, contributes around 12 per cent of the state's gross domestic product and $4.6 billion in taxes to all tiers of government”.

“Whilst we still have population demand as a positive driver of the market, it needs to be complemented with the first home buyer grant for new housing and the interest rate cut”.

Mr De Domenico said, "Calls by the Real Estate Institute of Victoria to dump the $19,500 first home buyers grant was ill conceived and would lead to job losses in the current economic conditions”.

"It is important to move quickly to restore broad confidence in the property sector especially on interest rates to address the issues of affordability and assist families under the cost of living pressures."

Mr De Domenico said, "behind every new home stands the employment of a range of tradespeople, employment networks of suppliers and ultimately the retail sector with homes requiring white goods, furniture and services."

"All of these sectors need stimulating urgently as it takes at least a few months for projects to be completed and the Reserve Bank should be taking this into account".

“With the building industry forecasting a further decline in Victorian new housing starts, the retention of the first home buyers grant which should be just limited to the building of new homes will provide the Victorian Government with a strong economic lever to maintain and boost employment in the building and construction sector, a cornerstone of the State's economy”.

“There is a lot of discussion about the car industry in Australia which is important with politicians from all sides noting its importance to maintain many suppliers of component parts to protect jobs”.

“The same conversation applies to the property and building industry in Australia. The new house and land package market is a major area of economic activity for thousands of small businesses across the State,” Mr De Domenico said.

Media Enquiries:
Ron Smith, Corporate Media Communications, UDIA (VIC) - Mobile: 0417 329 201