Much has been said about yesterdays stimulus package unveiled by the government but is this enough to give the property sector a push along?
The Government has announced it will double the first home owner grant from $7,000 to $14,000, and triple it to $21,000 for new homes built.
The lower end of the market definitely needs a push along, whilst the higher end will probably see a lot of people having to offload investment properties, possibly adding a lot of new listings onto the market and perhaps driving properties prices lower. Will state governments also get involved with some kind of stimulus packages of their own?
Real Estate Institutes and industry groups across Australia have welcomed the move, and some have said it will increase prices, but will it help?
What are your thoughts?
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What a scandal, just as we are about to go into the biggest financial black hole in our history Jenny Maklin wants to “help” young people into the market.
Young people sucked in by this disgraceful act will suffer as the property downturn turns their dream into a nightmare.
Aren’t governments supposed to be responsible ?, using first home buyers as canon fodder doesn’t quite fit that requirement.
Hi Mr Burns, thanks for the comment. I think what they are trying to do is help first home buyers and people who want to build properties. Maybe it will not get people over the line as much as they think it will. But for those people about to make a decision, or sitting on a decision I think it will do what is intended.
What we need now is pro active state goverments as well.
But Peter it’s the exact wrong time to be doing this, they’re targeting first home buyers who don’t realise whats ahead, it’s like throwing lollies onto a busy road so kids will go after them.
I think it’s the most cynical piece of work I’ve seen in a long time.
BTW there a little app called ieSpell http://www.iespell.com/ which allows you to spell check forms on the fly, a link to that on your site would help your contributors.
Monty Burns, you make a good point. People who are umming and ahhing about whether to buy a house should not be nudged over the line. While it will stimulate a bit of growth in the short turn to get over the current hurdle, in 2 or 3 years there will be even more people who can’t make load repayments and start going under. It seems like a huge downward spiral to me that all comes about because people are too keen to spend money they don’t have.
The wall street stimulus package was a bad idea and is widely misunderstood. Yes it will help first home buyers by allowing them to further borrow with low lending standards encouraged by the Federal Reserve System setting artificially low interests rates. Housing prices in Australia and the USA are being propped by these interests rates through their respective central banks.
This is terrible for the housing market as people can’t afford property and are would be forced to borrow huge amounts to pay for them, therefore, prices need to come down. If the market was determining interests rates, that would discourage the mal-investment whilst bringing home prices down to market level to get the cycle started again.
This article shows the housing bubble in 4 easy steps.
http://mises.org/story/3130
still can’t spell after all these years…. meant to say “interest rates”