In what will be another blow to Rudd policy, the number of victims of the First Home Owners (Vendors) Boost is starting to mount.
The Sydney’s Sunday Telegraph has published a story today of several first home owners from Sydney’s southwest where falling prices have resulted in negative equity, and rising rates is clawing even more money from already over stretched budgets.
Louis Christopher from SQM Research said first-home buyers who entered the market with the help of government grants can expect a hard year ahead. “The scheme was all about saving the market from a big correction, It was never about improving affordability for first-home buyers.”
ยป Home dreams turn sour in the southwest – The Sunday Telegraph, 9th May 2010.
I am not surprised to hear this. It is going to get worse soon.
The big problem that has been created by letting so much money go into overpriced houses is that it will start to eat into peoples spending on other basic things like food, petrol ect…. this will lead to unemployment this will lead to the RBA starting to cut rates but the rates may not come down due to credit drying up overseas thus our banks will notbe able to lower the current rates much. If this unfolds Australian house prices are going to crash its just simple maths!
Rudd has taken a big chance with the way he has run thing in the last two years, Australia may end up paying a massive price for his rekless spending and bad FHB handouts.
I think there is a big chance with the Greek bailout… and the British Government having a $20 billion dollar hole in it due to the BP compensation (major shareholder in BP is the British Governments Pension Fund).. that the world could it another financial crisis soon..
this would mean that both labor or liberal will increase the first home buyers grants again. both parties have the same policies. watch out for the greens and family first at this election.