It seems most property commentators agree the property market is generally buoyant in the market below $500k due to the first home buyers, however stagnant or declining in the greater than $500k market.
In the May budget the Government will announce whether the first home owners grant will be extended. What is everyone's view on the potential impacts this announcement will have to the property market?
If the Government reduce the first home owners grant will it trigger a slide in the lower end of the market, or will first home owners remain active due to the low interest rates / high rental costs?
I guess my question really is, is this a time to sit back and wait for the announcement in the hope to pick up a bargain if the govt don't extend?
Since posting my question last night, Kevin Rudd has today announced the first home owners grant will end on June 30! Whilst the article actually sounds like the whole FHOG will be canned, I assume this is incorrect and the government will return it to the pre October 07 figure (i.e. $7k).
Refer to: http://www.news.com.au/business/money/story/0,28323,25373584-5013951,00.html
So, this takes away the "IF" part of the question.
So what is the general view of the potential impact this will cause to the property market?
Terry Ryder has also released a press statement today providing his opinion that this will have very little impact to the property market.
Refer to: http://www.theaustralian.news.com.au/business/story/0,,25370451-25658,00.htmlI'm interested to hear the thoughts of the forum members?
Hi
Yeap. Agree with Terry Ryder in his article. Prices might drop by around $7K due to the lack of the FHOG Boost, but lower interest rates, reasonable prices (previously before the rush), and the actual lack of housing stock available on sale (shown in the high auction rates) are other factors to consider.
Personally, I do not think removing the FHOG Boost is going to do much. Tightening credit lending, rising unemployment and, once again, a severe limited number of available properties for sale are factors that will continue to keep the lower-end of the market (especially in SE Melbourne) bubbling nicely.
Regards
Daniel
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