First Home Owners Loan Australia, Good or Bad?
Have you a First Home Owners Grant, what are the risks?
With many Australian’s opting for take the huge step and purchase a new house, it has got be asked if the new home owners grant is putting Australian’s in houses beyond their unassisted means.
Well there have been some reports in this weeks press about the possibility of the home owners grant causing trouble in the long term. Read some of the reports before you going diving in.
THE First Home Owner’s Grant may become a $25 billion time bomb and make it even tougher for people to get their first house.
As the development industry called for an extension of the $14,000 grant to all home buyers to stimulate a dormant market, Reserve Bank deputy governor Ric Battellino warned the funding could backfire.
Analysts also forecast a potential housing crisis later this year with rising unemployment pushing up to 460,000 households “close to the edge” through mortgage stress.
Mr Battellino said the $21,000 available to first-home buyers could end up being priced into the cost of the home.
“It doesn’t take long for the average house price to increase by $20,000 and leave the buyers no better off,” he said. Forecasts were for a “substantial rise in unemployment”, he added.
Human Resource manager Emma Holmes, 26, moved into her first home, a unit at Seaton, less than two weeks ago and described the grant as a “massive boost”.
“It was great because it basically covers stamp duty and fees, the sorts of costs that creep up on you a bit,” she said.
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“I’d hate to see it not around after June, because too many people will miss out.”
Stock market analysts ABN Amro said the first-home owner segment was becoming “inherently risky”.
“The confluence of artificially high housing prices, lack of savings record and higher unemployment risk makes the first-home buyer segment a high-risk segment,” he said.
Economists Fujitsu Consulting said it expected to see a significant rise in mortgage stress this year.
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