From today, October 1, the First Home Buyers Grant Boost has been phased down to $14,000 for the purchase of newly built properties, and $10,500 for established properties.

The boost which was introduced last year as part of the federal government’s response to the global financial crisis, originally entitled first home buyers to $21,000 for the purchase of newly built properties and $14,000 for the purchase of established properties.

The reduced boost that came into effect today was part of this year’s Federal Budget and will run till December 31 – at which point it will revert to $7,000 for established properties and $14,000 for newly built properties.

While most economists believe that the reduction of the boost will impact building approvals and housing finance applications, the general consensus is that this would be a medium-term effect.

Other drivers are expected to hold up sales including population growth and a resurgence in the number of investors and people looking to upgrade.

Ray White deputy chairman Sam White, agrees with this assessment, saying a recent upsurge in property sales was not from first home buyers trying to capitalise at the eleventh hour on the boost, but by those upgrading their homes and property investors who were now more confident about the Australian economy.

“You look back and it was only in March when everyone was saying were on the edge of the Great Depression and we had all those horrible headlines”, Mr White said.

“But I think consumer confidence is returning with the realisation unemployment is not going to get to predicted levels now and I think that’s feeding people’s confidence.”