First home owner's grant boost

[Rainbow Moonlight]

I think this should be extended and also increased to cover ANY buyer of a newly built home to live in themselves. What do you think?

[Jovial Monk]

The FHOG for newly built homes has kept a lot of builders in work and meant that property prices have come down in an orderly, measured fashion--a sudden spectacular crash would have caused panic and huge loss of confidence all round.

But the government cannot write a blank cheque and a more targeted scheme would be fine. And rich people can find their own damn finance!

[mantra.]

The government is going to make some changes and extend it for a while longer. If they want to do some good - allow this grant for any first homes, whether they're new or not. It is the current home owners who can afford to move into new homes and they don't need the grant. The government shouldn't be encouraging young people to over extend themselves with new homes which is happening now while interest rates are so low. There are plenty of older homes which are far cheaper and can be used as a stepping stone.

[Jovial Monk]

This is a FIRST home buyers grant, Mantra.

[mantra.]

Yes Monk - I know that.

The $21,000 only applies to new homes & $14,000 for older homes. It's ridiculous to exclude older homes from this higher amount - as it is usually those who already own homes who are in a position to afford a higher costing new home, whilst older homes are cheaper. It still stimulates the market but helps first home buyers to get into a lower priced house.

[Jovial Monk]

If someone is buying a SECOND home they are not eligible for a first homeowners grant.

Why should it be limited? You are the one worried about mortgaging us to the Chinese!

[mantra.]

Monk - you seem to have difficulty understanding me. I didn't say that people should get the grant for a second home - only that those who are already established in a home are usually in a better position to buy a new home than most first home buyers who will be desperate to take advantage of the $21,000 and overcommit - especially if the interest rates go back up. If there was more of a demand for old homes - those who are financially secure and already own a home could be encouraged to update to a new home. No grant for them.

I said that the first home owners grant of $21,000 should apply to old houses as well as new for first home buyers. Old houses are cheaper than new houses.

[Jovial Monk]

No, don't think old houses are cheaper than new ones and I have studied real estate data closely!

The reason new houses attract more money is because it means builders are kept employed. It is an anti-recession measure, like the school upgrade program.

[Ethnic]

At the risk of being crucified I'm going to say that the FHBG should cease for established homes and continue for those who want to build. The focus of the grant should be to help the building industry - you won't do much if people are mainly buying established houses. There was a guy on the Today show this morning (don't know his name). Made some interesting points, something along the lines of:
- most people applying for the boosted grant are using it for established homes.
- house prices have gone up by $30 000 - $40 000 in some areas, making housing even more unaffordable.
- It's not having the desired effect (to help builders keep their jobs) because it is being mainly used for established homes.

So cease it or bring it back to $7000 for established homes and make it $30 000 to build. Plenty of work should follow because it is usually cheaper to buy land and build a home than to buy an established home in the same area. People get too greedy and demand more for their homes than their worth. With building you have more freedom and can keep costs down.

[Jovial Monk]

". . .house prices have gone up in some areas. . ." yup in the $400K and under category there is still buying and selling of homes, my realter mates tell me over $800K is pretty dead.