Good day!
I’m just a bit wondering: why did the Reserve bank decided to raise the interest rate twice (and probably some more on the way) rather than taking out the $7000 grant, if they want to cool off the property market? Which approach is more psychologically influential?
cheers
hisshohissho, the FHOG has nothing to do with the RBA – it’s a government thing.
I think interest rate rises have more psychological effect. For instance, an interest rate rise is hurting me, but not being able to get the $7K – well, I never qualified anyway.
Interest rates effect ALL people (especially investors which are predominantly the reason prices have kept going up), and FHOG only affects a small percentage.
Cheers
Melhissho,
By taking the $7000 out, I presume you mean the govt removing it. As Mel said, the grant is for first home buyers. I tend to think the interest rise was about slowing investor’s spending and cooling the housing market down for us mob than it is to slow down first homebuyers.
Whilst the Reserve Bank was very cautious about suggesting the rise was about the housing market… basically Aussies are in debt up the wazoo, and housing is the most expensive product we buy. The housing market has gone crazy, and we probably needed to slow down a bit.
As for first home buyers- because RE is now so expensive in capital cities- and presumably because we don’t want every young person to leave capital cities to live regionally or in the country so they can afford a home, the first homebuyers grant is probably used less and less noew, because first homebuyers can barely afford to get into the city RE markets.
We (investors) need to slow down, but first homebuyers need their opportunity (the $7000) to get their foot in the door.
kay henry
Let me tell you kay, that us regional people get very little help from the government, they couldn’t give a …. about farmers… [:p]
Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
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