Is the First-home grant a time bomb?

BillV · 6th Apr, 2009

I think the First Home Buyer Grant is helping push property prices up and this is good for developers and for the lenders as their security buffer increases but are higher property prices a good thing?

I went to a few open homes on Saturday and people were going in and out non stop. Many properties sell as soon as they hit the market and for the asking price so the next property is listed at a higher price.

Where is this going to stop?
What do you think?
There must be a better way to help first home buyers than this.

HE First Home Owner's Grant may become a $25 billion time bomb and make it even tougher for people to get their first house.

As the development industry called for an extension of the $14,000 grant to all homebuyers to stimulate a dormant market, Reserve Bank deputy governor Ric Battellino warned the funding could backfire.

Analysts also forecast a potential housing crisis later this year with rising unemployment pushing up to 460,000 households "close to the edge" through mortgage stress.

Mr Battellino said the $21,000 available to first-home buyers could end up being priced into the cost of the home.

"It doesn't take long for the average house price to increase by $20,000 and leave the buyers no better off," he said. Forecasts were for a "substantial rise in unemployment", he added.

Human Resource manager Emma Holmes, 26, moved into her first home, a unit at Seaton, less than two weeks ago and described the grant as a "massive boost".

"It was great because it basically covers stamp duty and fees, the sorts of costs that creep up on you a bit," she said.

more below
First-home grant a '$25bn time bomb' | Property | News.com.au
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Is the First-home grant a time bomb?

BillV Well-Known Member

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Is the First-home grant a time bomb?

BillV Well-Known Member

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