First Home Buyers win and lose in NSW budget

Budget surprise for first home buyers with the NSW announcing that changes mean brand new home buyers come out winners with a doubling of the grant but first time established home buyers lose the $7,000 FHOG- a federal grant introduced back in 2000.
http://smh.domain.com.au/real-estat...ing-for-first-home-buyers-20120612-20768.html

 

I can understand that the government is trying to push first home buyers to purchase new buildings or buy land and then build rather than buy existing homes, however I believe that they still should keep that $7K FHBG for those FHB purchasing existing property.

For me personally, I would not consider buying a new build or buy land to build on as the price is significantly more than I can afford. As I don't intend on buying a property before the FHBG expires for buyers of existing properties, I am left either to continue to try and save more for several years to cover that $7K loss of the FHBG, or put myself into more debt that would be comfortable with/afford.

I can see the point that the $7K FHBG was allowing FHB the ability to borrow more by having a a higher deposit, and being able to pay more for existing property and assisting with increasing the pricing of houses. However with the recent (and ongoing?) financial crisis, there has been a significant tightening of banks lending criteria, meaning that even if the $7K FHBG remained for existing property, FHB may not even be able to borrow as much today as they were able to previously.

It all seems a waste to me personally, however that is my opinion and is expressed as a single view on how it affects me and not the economy/country as a whole.

 

Hi Kwakker

You raise some valid points and the reason the govt has withdrawn the FHOG here for established properties is to stimulate new building- pure and simple. I'm not sure, like you, how much of an impact it will have given that most FHB's struggle to buy above $500K anyway and new stock is very limited in this price range especially here in Sydney. Given that approx 85% of FHB's used the grant for established housing, the govt certainly will be saving here. The current stamp duty exemption for buyers of new and OTP also ends in two weeks, and is being replaced by a much lesser $5K grant- peanuts compared to the $$$ that was given out in duty.

 

There's only just over a month left before first home buyers looking at existing homes will no longer receive the grant.

I know of a number of friends who are trying to buy before the deadline in order to get the Grant before it expires after Sept 30 2012.