 Future of housing market
As the first home owner boost is set to be reduced gradually back to the original level, the housing market is getting nervous.
Australia's property market has remained reasonably strong through the past 12 months. The global recession has affected our economy, this is true. However, the boost to the first home owner grant along with other government handouts and record low interest rates has kept the market afloat.
Since the boost was announced, and then extended, estate agents and mortgage brokers reported a rush of first home buyers storming into the market.
But now, as the grant winds down, fears for the property industries are growing.
Broking analysts are concerned about how the scheme's end, in less than three months, will hit the main sharemarket-listed players Mirvac, Stockland and Australand.
Property investors have been back in play in recent weeks, perhaps taking over from first home owners, as they dwindle.
But with the future unsure, construction jobs are declining and contractors are heading to the strong states.
''In Victoria, South Australia, Tasmania and the ACT, home building activity can be regarded as healthy, whereas NSW dwelling starts are at 56-year lows,'' chief economist of CommSec, Craig James, says.
The grant was increased as part of the government's first stimulus package, doubling the amount for established homes, and the grant for building of new homes was tripled. The boost to the grant is decreased on October 1 and comes to an end on January 1 when it reverts back to the original $7,000.
Join the discussion on First Home Owners Grant
|