The first home buyer grant, where to from now?
One of the most talked about subjects in and out of property circles over the last few months is; "Will the Government extend the first home buyers grant?" I think that the Government has come to a realisation on two fronts about this very question. The first is the raising of the grant has been enormously successful, in fact some would argue too successful. It has kept many people in a job for the last several months in the building and development sector and boosted the property market, mostly under $500,000.
Secondly, when the Government made the decision to introduce the boost to the grant, they would not have foreseen that the Reserve Bank would cut the official interest rate by 4.25% since September 2008. While the interest rates are now doing most of the job for them on the property side, we could see more stimulus packages to put more dollars in your pocket if things get worse.
Will the market slow and drop if the boost to the grant is dropped? The short answer is no, we expect it to have little effect, it may have created a little tiny spike in the market and that might just level off after June 30. In reality, anyone sweating on an extra $7,000 to buy a $350,000 property should maybe think twice about buying in the first place!