Property groups hail increase to home buyer grants
Property developers and real estate agents have hailed Prime Minister Kevin Rudd for boosting the first home buyers’ grant.
The government today said it would invest about $1.5 billion in the housing market over 2008/09 and 2009/10, as part of a $10.4 billion package to help Australia counter the global economic crisis.
The payment under the first home buyers scheme will be doubled from $7,000 to $14,000 for established homes, while first time owners of newly constructed homes will receive an extra $14,000 taking their total grant to $21,000.
The Urban Development Institute of Australia (UDIA) said the beefed-up grants would have a multiplier effect on the economy when new home buyers go out and buy furniture and white goods.
“This will give first home buyers a chimney to hang their stocking on this Christmas,” UDIA NSW chief executive Scott Woodcock said in a statement.
Urban Taskforce Australia (UTA) said the funding boost would help first home buyers, but state and local governments must follow suit to stimulate new home construction.
“The lack of new housing supply is hurting people across Australia, particularly in Sydney,” UTA chief executive Aaron Gadiel said in a statement.
“Without a strong supply of new housing, rents will continue to skyrocket and first home buyers will struggle even more to save a deposit for a home of their own.”
NSW Real Estate Institute president Steve Martin said the initiative would boost housing affordability.
“The tripling of the new home buyer’s grant to $21,000 is a positive signal to developers to start building new stock and adding it to the market, ” he said.
“This is great news for the property market as it will bring new home buyers in and create jobs through the construction of new dwellings.”
AAP
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Ron October 15, 2008
GE Money one of the largest non bank wholesale lenders in Australia announced yesterday they cannot afford to pass on any of the RBA’s interest rate cut to their home loan clients. This is a company that boasts a AAA rating compared to the Australian Banks AA. This is absolutely disgraceful and the company should be put to shame. GE Money clients will now be paying a much higher rate than the competitors but clients can’t change because the exit fees are as high as 1.8% of the original loan amount. On a loan of $500,000 for a client whose property has reduced in price, the costs to change over are about $25,000. GE Money’s action not to pass the rate cut on their portfolio of approx $20B will earn them a fortune at the expense of the poor Australian consumer.