The federal government’s six-month extension of the first home owner grant (FHOG) boost has been criticised for being too short and announced too late.

The boosts, which gives first home buyers an extra $7,000 when purchasing an established home and an extra $14,000 for new homes, were due to end on June 30.

The federal government said in its 2009/10 budget on Tuesday the initiative will be extended for six months.

The full boost will continue homes purchased on or before September 30 this year.
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It is premature to end the federal government’s first home buyers grants at the end of the year when economists predict tougher times in 2010, the Real Estate Institute of NSW says.

The federal government has extended the grants until the end of the year but they will be reduced from October 1.

“It is disappointing that we have not seen a commitment to continue the enhanced initiatives for a full financial year given that government and economists are predicting even more difficult economic times in 2010,” institute president Steve Martin said in a statement.

“The sooner the property sector recovers, the sooner the rest of Australia will start to enjoy better economic times.
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Rental accommodation in outer and inner Sydney suburbs continues to plummet, prompting renewed calls for banks to pass on the latest cut in official interest rates.

The Real Estate Institute of NSW says the percentage of available properties for rent in suburbs more than 25 kilometres from Sydney’s CBD fell from 1.1 per cent in February to 0.9 per cent in March - the lowest result recorded since June 2008.

Overall Sydney rental vacancies fell by 0.1 per cent to 1.2 per cent, the lowest recorded since October last year.
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Activity in the NSW property market is expected increase over the first half of 2009 as buyers return tempted by lower interest rates and government grants, an industry body says.

The Real Estate Institute of NSW (REINSW) says the return of first home buyers has “re-energised” the state’s property market.

REINSW president Steve Martin says early signs in 2009 of a strong return to the residential market by buyers is expected to continue.
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Sydney’s rental market remains very tight with little change in the vacancy rate over recent months, new figures show.

The Real Estate Institute of NSW said the percentage of available properties in Sydney remained largely unchanged for the last four months of 2008, but there were significant increases recorded in both Newcastle and Wollongong.

“For December the available rental vacancy rate rose just 0.1 per cent to 1.4 per cent, which means the market remains very tight in Sydney,” institute president Steve Martin said in a statement.
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