ACT first home buyers loans drop

First home buyer loans in the Australian Capital Territory plunged by as much as 50 percent during the three months to October 2010 says a housing report.

The executive director of the ACT and Southern NSW Housing Industry Association, Stuart Collins, told The Canberra Times that local authorities should offer more for first home buyers citing the removal of stamp duty and increasing the amount of the first home owner grants.

''We are moving into a period of marked downturn in dwelling starts. HIA is forecasting a 30 percent decline in dwelling starts in the ACT in 2010-11,'' Collins said.''First home buyers have made an exodus from housing markets across Australia since the removal of the Federal Government's First Home Owners Boost, including in the ACT.''

Industry executives have been calling for the removal of stamp duty saying that it was already considered an inefficient tax. The local government considers conveyances as its second largest gross tax source and is estimated to comprise of 22 percent of revenue next year.

''HIA calls for the review to examine an option of reducing or significantly decreasing stamp duty on new properties in the ACT,'' Collins added. Last year, an accelerated land release campaign by the government resulted in more than $110 million worth of profits from land sales. This led to the Land Development Agency giving back $250 million worth of taxes, payments for land and dividends to the ACT Treasury.