FHOG has inflated property market: BankWest report

FHOG has inflated property market: BankWest report

27 August 2009 by Staff Reporter 0 comments

Almost one in five Australians believe the government’s First Home Owners Grant has been counter-productive and artificially inflated the market, the Bankwest / Mortgage and Finance Association of Australia (MFAA) Home Finance Index has found.

According to the Index, 17.6 per cent of respondents said the grants had caused house prices to go up while 13.9 per cent said they would wait until the grant had finished before taking the property plunge.

MFAA chief executive officer Phil Naylor said despite the significant cash grants and stamp duty relief, six out of ten respondents feel the government is not doing enough to help first time buyers.

“While governments are providing cash relief for first time buyers, there are arguably issues relating to housing supply that would be influence this perception,” Mr Naylor said.

Mr Naylor said that when asked whether the decision to extend the grant influenced their decision of whether to buy a home, 39.4 per cent of respondents agreed. Only about one in five said that they were more likely to buy a home as a result of the extension.

“It can be tough getting into the housing market, particularly in expensive capital cities, and first time buyers are exploring a range of options to overcome this,” he said.

 

Almost one in five Australians believe the government’s First Home Owners Grant has been counter-productive and artificially inflated the market, the Bankwest / Mortgage and Finance Association of Australia (MFAA) Home Finance Index has found.

According to the Index, 17.6 per cent of respondents said the grants had caused house prices to go up while 13.9 per cent said they would wait until the grant had finished before taking the property plunge.

MFAA chief executive officer Phil Naylor said despite the significant cash grants and stamp duty relief, six out of ten respondents feel the government is not doing enough to help first time buyers.

“While governments are providing cash relief for first time buyers, there are arguably issues relating to housing supply that would be influence this perception,” Mr Naylor said.

Mr Naylor said that when asked whether the decision to extend the grant influenced their decision of whether to buy a home, 39.4 per cent of respondents agreed. Only about one in five said that they were more likely to buy a home as a result of the extension.

“It can be tough getting into the housing market, particularly in expensive capital cities, and first time buyers are exploring a range of options to overcome this,” he said.

 

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