First home buyers are checking out the market, learning what’s available, but they aren’t yet buying real estate. And that’s to be expected. Many of them had, until recently, pretty much given up on purchasing their own home. Prices were skyrocketing, and the old $7,000 First Home Owners Grant had long since been off-set by the increases in real estate prices.
When Prime Minister Kevin Rudd announced the new $14,000 First Home Owners Grant, their hopes were raised. Property prices have dropped slightly in 2008, and with interest rates coming down, property is as affordable now as it has been for quite a while. As a result of this, mortgage lenders have seen a huge increase in the number of first home buyers checking things out, and that’s great!
The problem, however, is that there is a risk that this boost for First Home Owners could push property prices up by more than the $14,000 grant, thereby making the grant obsolete. For those who get in early, it’ll be great. Act fast, and you’ll be set. Take your time, and you could miss out.
Some people have also been critical of the Federal Government’s increase of the FHOG. The Greens want “to ensure that any first home owners grants available for new houses are only for houses built with a high energy efficiency rating”. Professor Steve Keen is also critical of the Grant, saying they “added fuel to the speculative fire of finance”.
For details on the First Home Owners Grant, including how it applies to owners building a new home, check out the Housing Industry Association. To apply for a First Home Owners Grant, visit www.FirstHome.gov.au, and select the appropriate State.