Govt urged to extend first home grant

The temporary boost to the first home owner grants should be extended beyond its June 30 cutoff in a bid to support the economy, industry groups say.

Official statistics show the boost, which formed part of the federal government's $10.4 billion fiscal stimulus package announced in October last year, has tempted first home buyers back into the market.

Senior corporate affairs manager at mortgage broker Mortgage Choice, Kristy Sheppard, said the number of inquiries and requests for information had jumped since the grant was increased and as interest rates came down.

"We definitely support any extension to that first home owners' boost," Ms Sheppard said on Friday.

"There's been a huge influx of first home buyers into the market ever since the first home owner boost was announced."

The federal government doubled the first home owners' grant to $14,000 for existing homes, and tripled the subsidy to $21,000 for newly built dwellings.

The Mortgage and Finance Association of Australia (MFAA) said this week it had written to the government urging that the temporary boost, which expires on June 30, be extended.

"There is a wealth of evidence showing that it is a highly successful program and is attracting new entrants into the market now, who may otherwise have to delay their purchase while they continue to save," MFAA chief executive Phil Naylor said in a statement.

First time buyers comprised 25.4 per cent of all home loans approvals in December, a seven-year high, according to the Australian Bureau of Statistics (ABS).

It was the third time in as many months the proportion of first home buyers in the housing market had increased.

Real Estate Institute of Australia (REIA) president Noel Dyett said the boost appeared to have been successful, but stopped short of calling on the government to extend the scheme.

"The government has put it in place as a stimulus, it's up to the government to decide how long it wants to keep that running," Mr Dyett said on Friday.

"But if they wanted it as a stimulus to the economy it's working.

"We would strongly recommend they consider it very carefully before they cut it."

The four percentage points of interest rate cuts by the Reserve Bank of Australia (RBA), most of which was passed on by lenders, have helped paint a somewhat brighter picture for the housing sector.

The total number of home loan approvals for owner-occupied housing rose by 6.4 per cent in December, ABS figures showed. It was the third straight month of improvement.

Independent commentator Warren O'Rourke, who also supported an extension of the boost to the first home buyers' grant, said a healthy housing industry would support a lot of other sections of the community.

"There are so many spinoffs," Mr O'Rourke said on Friday.

"It really is a very important aspect in terms of the contribution it makes to the economy."