Confusion reigns over fate of boosted FHOG

by BN24 Apr 2009

Yesterday the prime minister indicated the boosted first home owners grant would not be extended beyond the 30 June. Today, reports in the Daily Telegraph and Herald Sun suggested it would be extended when the Budget is announced on 12 May.

The Daily Telegraph quoted "insiders" as saying the boosted grant would be extended following lobbying by the housing industry. A report in The Australian last week also said extending the boosted FHOG was a "certainty" in the budget.

But yesterday, Kevin Rudd said in a speech in Perth that "all good things must come to an end" and that the boosted FHOG was only intended for a finite length of time.

Lobbyists, including AFG, the MFAA and The Loan Market Group have all called for the incentive program to be extended.

AFG, which reported its best month ever in March, said not extending the program meant the market was likely to suffer a "hangover".

Critics argue the scheme is creating a false market bubble and may be putting people in homes they could otherwise not afford.

The CBA's Ralph Norris said recently the scheme should not be extended.

The boosted first homebuyer scheme was introduced last December as part of the government's first economic stimulus package.

First homebuyers of existing houses receive $14,000, while those buying a new house receive $21,000 - as opposed to just $7,000.

Related stories:

Rudd: FHOG boost to end 30 June 
 

 

COMMENTS

  • by Angela Trzan 24/04/2009 2:06:37 PM

    What better way to stimulate the economy? helps tradesman, first home buyers, brokers, agents and the general economy. It is simply too onerous for first home buyers to try and break into the housing market on their own. Can't really see a downside to extending the grant.

  • by Rhys 24/04/2009 2:34:43 PM

    They have no more money to spend... If they stopped handing out money maybe they could have extended it.

  • by Dave 24/04/2009 2:42:19 PM

    The grant should extended for construction only