FHOG a 'waste and a distraction'

by Adam Smith20 Mar 2012

A regional bank head has slammed first homebuyer grants, calling them "a waste".

Bendigo and Adelaide Bank chairman Robert Johanson has told News Ltd that first homebuyer grants are poor policy. He said the grants only serve to unnaturally drive up the cost of housing.

"The government were just giving people money to get into new houses, which transferred the value to the sellers. It just puts costs up," Johanson said.

Johanson said the grants were "bad policy", and that the housing market had succeeded because of economic prosperity rather than government intervention.

"The investment in housing was really driven by the prosperity rather than government policy. I think it was a waste and a distraction," he said.

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  • by Country Broker 20/03/2012 9:54:52 AM

    How does Johonsan account for all of the first home buyers who are using his bank in Regional Victoria to construct new houses because they will receive a $26,500 Regional Vic Construction grant , we are seeing houses built with solid clients borrowing NOW .
    I find these comments rather confusing to say the least.

  • by NoTimeLikeTheFuture 20/03/2012 10:45:04 AM

    I wonder if Johanson thinks negative gearing is also poor policy which unnaturally drives up the cost of housing?
    Main difference is first home buyers need a place to live. Negative gearers are often high earners who are just in it for the money and the tax break.

  • by Wozza 20/03/2012 11:28:47 AM

    Let Mr Johanson tell all those first home buyers who used the FHOG to get into the market for the first time that it was bad policy. A hand was what they needed and now they have security and equity in a property. Anyone with this short sighted outlook should also have a short future