Real estate agents are split on whether the government should provide stimulus to the housing market during flat periods, with just over half the industry suggesting this to be an effective measure.
According to Real Estate Business’ latest straw poll 51.1 per cent of the 266 respondents believe governments should inject stimulus into the property market during flat periods. However, 48.9 per cent of the respondents would be much more satisfied if governments did not intervene at all.
Australian Property Monitors’ senior economist Dr Andrew Wilson said while injecting stimulus may alleviate some of the pressures over the short term, the medium term effects can be more detrimental to the market.
“Any stimulus injected needs to be very carefully directed. In 2009 the federal government introduced the First Home Owners Grant as a way to stimulate the post GFC market and experienced record levels of first home buyer activity over the short term,” Dr Wilson said.
“However, looking at the medium term, we experienced an artificially high demand period that pushed property prices up. The government brought demand forward, which has now caused the flat period we are currently experiencing as the market enters a correction phase.”
Moving forward, Dr Wilson said he remains confident the market will soon pick up as strong buyer demand coupled with a lack of available stock should drive activity forward.