Boosted Grant Extension Welcome: Loan Market

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Loan Market Group LogoAustralia’s largest independent mortgage broker Loan Market Group has applauded the decision in tonight’s Federal Budget to extend the boosted First Home Buyers Grant for another six months.

Loan Market Group Executive Director John Kolenda said the decision to extend the expanded grant scheme would provide some certainty for first time buyers, the residential real estate sector and the housing industry.

Mr Kolenda said doubling the First Home Buyers Grant to $14,000 for established homes and $21,000 for newly built properties last October had helped underpin the residential property market during the global economic crisis.

“The real estate market was at risk of a downturn if the boosted grant was allowed to expire as scheduled on June 30,” he said.

“The boosted grant was one of the most successful of the Federal Government stimulus packages and it’s welcome news that the Government has heeded persistent calls from Loan Market Group and other organisations to extend the scheme.

“It shows that they are carefully considering the state of the property market.”

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1 COMMENT

  1. Great news John! I don’t think so mate. We are seeing again and again inflated prices under the 500k mark. What will happen in 2-3 years time when these first home buyers either go to sell or refinance? The properties they purchased will be worth less than what the mortgage is at that time for a majority of these current first home buyers. Also, when this happens and given the nature of today’s first timers, a lot of these clients have guaranteed loans encumbering other peoples properties. What happens when the first home buyer can’t afford the short fall? Will the guarantor pay up?
    This combined with extremely slow turnaround times from the funders and more stringent guidelines for lending means that the clients experience is horrible and unfortunately the broker cops it. Although you keep the client in the loop with turnaround times/service levels etc, Ultimately, there is a lot of emotion that will inevitably rule that clients perception of the experience.
    A better alternative would have been to incentivise non first timers buy reducing stamp duty up to a million dollars. This would stimulate the mid-higher end of the market. Not so much as the grant but at least it would balance out most of the market and avoid the pain of over inflated properties.
    Wayne Swan just proves time and time again that you don’t need a long neck to be a goose.

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