It’s the 64 thousand dollar question – With the housing market once again collapsing, just like in 2008, will the government re-introduce the first home buyers’ grant to prop it back up?
With a federal election due next year, Aussie Home Loans boss John Symond expects a new boost towards the end of the year.
He told the Property Observer, “Probably my cynical self says six to 12 months ahead of the next election, it would not surprise me that the government might stimulate housing by helping first-home buyers and they may possibly introduce a bonus or a boost to the first-home owner’s grant.”
According to Treasury, the government introduced the original first home owners’ boost in 2008 to encourage first timers who had been saving for a home to bring forward their purchase and prevent the collapse of the housing market. Bringing forward so much demand, has left a large void now that the free money is no longer available.
Figures out today show the first home buyers grants have also helped some 1,200 South Australian investors enter the market, or at least until they had to pay the grant back.
South Australian Minister for Finance, Michael O’Brien told the Advertiser, “This program is designed to help South Australians get a roof over their head, not to help them into an investment property.”
» First-home owner’s boost could return this year: John Symond Property Observer – Friday 6th January 2012.
» 1200 forced to repay home grants – The Advertiser, Tuesday 10th January 2012.
Aargh!
Firstly, when will everybody wake up and realise that the property market does not need propping up and should not be propped up? The market has to find its own way through the natural processes of the economy within society, through our own individual levels of affordability, depending on our own balance sheets. We have seen time and time again, around the world, that governmental interference in market forces does NOT help – it does exactly the opposite!
Secondly, the First Home Buyer’s Grant did NOTHING to help actual first home buyers in real terms because vendors and estate agents just increased the asking price by the same amount. It should have been called the Home Vendor’s Grant! Utterly useless and completely counter-productive.
I know I’m just a whinging Pom who’s on the eve of emigrating to Australia at a time when the exchange rate has never been so bad and property prices have never been so high, but surely the government can see just how unsustainable the situation is and how deeply unjust it is for those of us looking for a decent home at a fair price. I’m sorry for anyone who bought at the top of the market, but as with most things in life – Caveat Emptor!
@Rupert,
At this point, all of average joe Australia, and the banks, wealth is tied into leveraged house prices. If the housing bubble pops, so does the Australian “Luck County” economy. It will take a decade or more to return confidence and stability to the Aussie market. Also, the big four banks are the biggest property speculators and are pivitol to the Australian economy… If the big fours credibility – even solvency – is put into question, a whole can of worms gets opened up and none of the content will be particularly palatable.
They (Government) are going to throw everything they can at housing prices… Its not so much about a bubble any more its about keeping a country afloat.
As with any trade or investment where you go all in and well beyond your means, the trader/investor has no choice but to deny reality for as long as possible. The alternative is simply too unbearable. Tragic position to be in…
Yep thats exactly what will happen.
Both sides of politics need to buy votes and what better way is there to do that by bribing Mr and Mrs average bogan into an over-priced ponzi property.
John is right.
Yes, John Symond would say something like that wouldn’t he. He is not impartial as a mortgage broker. He is tapping into the understandable insecurities of all first home buyers trying with others initiate another feeding frenzy of potential new borrowers.
Most people are cynical about government intentions and what they now see as the purported importance of housing to the economy. So John Symonds comments must have the ring of truth…?
There is a lot of burley in the water and that nice juicy chunk of tuna has a nasty sharp hook in it.
Problem is that our media is complicit as can be seen by many in their reporting of info-tizing as news.
Cynical?….you are dam right I am!
We prop up the car industry, lending market, car dealers, child care, unemployed, families just to name a few. This is where the tax goes, so enjoy working to subsidise the weak. Welcome to Australia, cradle to the grave welfare.
John Symmonds is a loan shark, he profits from indebting Australians. Nothing more.
House prices are a factor of the LVR banks use. They hold the key. The average aussie is blind and would think a grant to buy is good. Go for it punters.
Praying on peoples need for housing by enslaving them to the banks is no way to run this country. We should change the way we price housing to what it is – shelter from rain and not speculative investing for the able. Negative gearing has caused alot of this problem.
POP !
Yoda, you forgot the Tourism Industry : Tourism asks for similar aid offered to carmakers.
Looks like everyone needs a bailout. I wonder why?
Qld govt to extend home grant: report
The Bligh government has just extended the $10,000 new home buyers grant for three months, past the state election speculated to be in February. Apparently they didn’t want to drop the grant half way through the election campaign.
To be honest even if they do bring in a big first home buyers grant it would have to be a massive incentive probably 10% of the property value plus knock off stamp duty. Young people don’t have $100k sitting around in savings for a 20% deposit to avoid the bank taking there cut of mortgage insurance. First home buyers are gone. The supply base for the ponzi scheme has dried up. All that is left are baby boomers swapping houses for their retirement fund, if they can find a buyer! Check out sunshine beach near Noosa. Every second house for sale.
The FHOG wont work this time as the government has all ready sucked in the young people and now they in over there heads in debt and is starting to show with foreclosure homes on the rise. Anyone that didn’t get sucked in the housing market last time. are not going into it now The more money the governmet injects it to the housing market the bigger and faster the fall. As we have seen in the US and starting to see in China when governmet intervenes. Cannot have infinite growth. All the government is doing is kicking the can down the road so it dosen’t happen on there watch and they have ran out of mre road.
Well the obvious is pretty obvious. In Australia we have first home buyers, who are generally on lower incomes, in a position where rents are enabling them to save very little if anything, if they are renting, on top of losing money in savings if they had any due to inflationary effects and low interest rates, no incentive to save, yet not earning enough money or unable to get enough credit to purchase a home.
What does this point to?
Could be a number of things, wage growth for low income earners, fleeing the rental market and moving back home or rental homes having more people living in them to reduce rental payments. Its not a question of a tight rental market it is a question of affordable rental properties, which is where investors hold the key. With low or negative housing price growth do they want to hang onto these properties and not earn any capital from them until wage growth catches up, or do they hope the last 10 years repeat themselves. Investors would cut and run, speculators would hope. Seems John Symond is a speculator.
It’s got no hope of working again. The supply of greater fools is well and truly exhausted.
http://www.heraldsun.com.au/news/more-news/landlords-feeling-the-pinch/story-fn7x8me2-1226243996889
http://www.sqmresearch.com.au/graph_vacancy.php?region=vic%3A%3AWestern+Melbourne&t=1
This is within 25 km of the second largest city in the country.
Unless we see a huge inflationary spike led by wages, the next generation of buyers could not possibly afford to borrow sufficient funds to cover the previous tranche and their want for 7-10% p.a. growth. Anyone who works a PAYG job will know full well that anything beyond a 2-3% annual pay increase comes straight out of the bonuses paid to the higher management above…….the same mob they negotiate with! It’s the reason why we’ve seen stuff all inflation globally despite the massive QE programs – the elite haven’t parted with it and only a trickle has found its way into the hands of the great unwashed.
Our country has become one great big welfare State. Everybody is holding their hands for our tax dollars.
Half the idiots I’ve visited who boast McMansions worths millions (speculation upon unrealised prices) have empty fridges, no carpet on the floor, empty half finished rooms and crap marriages. Yet, by being unproductive, mediocre individuals they have the gall to gloat with each other and make out they are players. They didn’t work for it, they indebted themselves to the point of not putting money into our economy but into the banks or they sat on their fannies and watched the speculation run rife.
We don’t need any more idiots, we’ve bred them and imported them: Time to stop the Bogan Locum. Let it crash, put an end to funding useless enterprises and people. Start investing in productive, healthy and foresightful people who actually do something other than irritate everyone else.
With so many people on welfare, that is an observation from a person working in CentreLink and people I know working for employment service providers for CentreLink (like Mission Australia, Salvos,…), more difficult to get suitable work and come by money. Noticeably much less money circulating in everyday affairs. A really high unemployment number/rate, yes for those that have just passed by this blog/forum and happened to stumble across this comment, yes! a really high unemployment rate that kinked northwards from around June-July 2009 increasing to this day.
A Banking system in which I can’t figure out whether they’re excelling seeing their acclaimed profits, or are hiding books stamped with thick red ink, and the higher level position holders ready to resign two days before someone screams, “where did that black hole come from?”.
Personal debt being very high, credit card debt already in orbit now extending its orbital radius. Right up to the collective level of debt approaching $2.2 Trillion, Personal + Private + Government = $2.2T. That’s Australia.
Yoda and ‘Where will it all lead’, you mentioned welfare, does anyone have even a slight idea, an idea on the right track on the extent and intrenchment of welfare recipients in Australia? Well knowing people (as mentioned above) in CentreLink and assoicated agencies, and a Statistician for a State Government Department (not the ABS), I can describe it as Gi-normous. Bigger that gigantic and bigger than enormous. The rate fluctuates (in calculation when variances are considered) between 14.9% and 17.1%. Yes including under-employed that require CentreLink assistence to subsidise the not enough income. Considering other welfare programs like child allowance, sickness benefits (actually there’s another number used to hide unemployment), … welfare goes well into the 20s%. Oh the NEIS program. A program to assist individuals who started their own business, get the equivalent to the doll without its hassles, was once really hard to attain. Now I’m told, go to CentreLink then an employment service provider for CentreLink, tell them something like you’re going around shaving peoples arses for money and you’re off Newstart and on to NEIS.
Retail as well as many other industries are just one chain pull away from the S-Bend and…
Property prices are high! I can’t say whether they will crash, slowly come down, drop slightly, or go up. Don’t know, I feel like I’m in Alice in Wonderland, or even Go Ask Alice, when it comes to property. Maybe AverageBloke you’re correct, Negative Gearing has something (just how much?) to do with it.
I do know something though, I can see right in fromt of me everyday. Reality has hit many people in a real hard way. Financially. Many people are in a real bad way when it comes to money and debt. ‘Where will it all lead’, its’ not just the McMansion idiots, also the million dollar mortgage moron in Sydney Eastern Suburbs with an Audi, and not even two 5c coins they can rub together.
John, John, excuse me Mr. Symond, I think that’s naplam you want to throw on that fire…
BotRot, spot on about unemployment.
In the Canberra Times yesterday : Workers go begging as unemployment numbers don’t add up
High property prices are not good for anyone. It is sad that people have to pay so much for houses because this reduces the quality of life. I am so happy that I did not buy a home, I started a business instead using the deposit that I was saving. Much better to make money by helping people than investing in property and harming people. I would never take up the first home buyer grant on ethical/moral grounds. I see it as no different from benefiting from the proceeds of crime – in this case taxes, which I see as the legalized theft of our money. I am politically agnostic because all governments controlled and manipulated to benefit those who control them….