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Victorian stamp duty exemption could push up property prices

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Australian Broker | 07 Mar 2017, 08:25 AM Agree 0
The state government’s recent move to exempt FHBs from stamp duty may end up hurting them financially
  • Albert Callegher | 08 Apr 2017, 02:59 PM Agree 0
    Research shows every time a State Government gives the housing market an artificial financial boost, such as first home buyers a financial incentive, prices rise quickly and 2-3 years later the market struggles with artificially inflated pricing, then pricing flat lines or under performs compared to CPI.
    Understandably the Government is trying to stimulate the housing market in particular first home buyers. The problem is these people simply dont understand responsibility of saving money, are then given free money to purchase a dwelling. If these people loose their job or rates go up or simply mismanage their affairs, they have demonstrated they prefer to spend their money and receive free Government hand outs to buy their first home. This is not how you educate young people responsible financial management so if times get tough they work through it and no dump their dwelling onto the market.
    What the Government is missing is that people need to live in a dwelling, either owned or rented. So why not create a dual purpose stimulus to stabilize a transition period from less investors to more owner buyers.
    To safe guard the financial system in particular banks, why not stimulate younger generation into saving more in turn, alongside this stimulate supply by reducing bottle necks in the supply chain of dwellings, keep investors buying , slowly wean investors off negative gearing capital gain tax breaks whilst introducing incentive to first home buyers that have saved. Savings can be such as higher interest rate earnings for those who qualify paid at settlement. It serves to build a longer term sustainable society and a stronger banking system.
    The result will create a more balanced market and when the Government sees fit to re-balance create savings related incentives not free giveaways that create longer term bubbles.
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