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Will you miss the bonus first home buyers grant?
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Posted 07 May 2009 - 08:19 PM
There is speculation the Federal Government will pretty much scrap the extra first home buyers grant of $14,000 in the May budget ‚€“ except in Victoria, where the Brumby Government has elected to maintain the extra $14,000 for those buying and or building brand new homes.
Should we be upset over the end of the boost for first home buyers?
After careful consideration, and as one who would miss out on the boost, I say good riddance!  The bonus of $14,000 has served to only distort the market. Since the introduction of the first home buyers' "boost", housing prices for the lower-end sector, priced between $250,000 - $450,000, have dramatically risen. According to RP Data-Rismark, both house and flat prices in Australia increased in value by 1.6% in the first three months of the year, growing even though the economy had officially entered a recession. The extra boost whilst generous, has motivated more first time home buyers to enter the market than there ordinarily would be. The relationship between supply and demand dictates, more demand relative to supply, and prices rise. So naturally the prices of established homes in the lower sector have risen, making even these homes unaffordable for many average Aussie families.
Perhaps without the financial boost, distorted property prices may very well come back in line, with affordability.
I wonder if we are actually heading for a housing crisis later this year. With the prediction of rising unemployment levels many households may well find they are close to the edge. Experiencing mortgage stress, because they are in an overvalued home, which ordinarily with out the extra $14,000 they couldn‚€™t afford anyway.
Sonia Williams a mother of two, qualified accountant, author and founder of the site Show Mummy the Money, where you can learn how to, save, make and protect their money. This information is correct at time of writing. It is general advice only and has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.
Posted 09 May 2009 - 01:46 PM
Good riddens? Good grief.
No, I won't miss it as we already owned a house. I'm not sure that I agree that it has distorted the market to the extent you claim as banks have tightened up on lending so much that I think it's less likely that an extra $7000 would mean that people could borrow so much that it would tip them into mortgage poverty.
The last I read about the FHOG was that it was to be scaled back to the prior levels, not scrapped completely.
Posted 09 May 2009 - 03:42 PM
ok, so our circumstances are totally different.
we live on a farm, has 2 houses, my in laws own both of them.
so, we are going to buy this house, we have lived here for 2 years and have made lots of improvements.
we are in vic, and beacuse at this moment we dont have enough savings to buy the home (need 2-3 more months to get organised) we are so glad to see that it is staying around.
the good thing for us i suppose is that we have a kind of fixed price of the house, which is great.
I can see how it has made the housing market crazy. I seen koshie on sunrise saying that in some areas, you are better off to wait until after the grant is gone, then buy, as the market is going to work out better for the buyers within a couple months?!
i do also wonder, how many people have rushed out to get themselves a new home? then loose their job, thus putting them in an awful spot?? those statistics would be interesting
Posted 09 September 2011 - 01:37 PM
We will be buying our first home in a few years' time, and the scale-back (or complete removal) of the grant will not affect us because we haven't factored any amount in from the government with our savings and deposit plans.
I agree that the FHOG has distorted the market.
Will be interesting to see what happens to prices if/when it is removed.
Posted 09 September 2011 - 01:41 PM
Why are these posts showing in the recent discussions when they are years old?? Another of her posts was showing before with no replys and dated back in 2009.
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