What do you think the Government will do with the FHOG come June 30?
With STG Bank & RAMS no longer offering 100% lending this would mean that the average first home buyer would have to come up with $25-30k up front to get in to their first home. If the FHOG is decreased - the majority of first home buyers will be pushed out of the market and prices will plummet further.
What are everyone elses thoughts?
I'm forming the view that the FHOG that was in place since 2000 will stay but the FHO boost will end 30 June.
The introduction of the boost has seen a lot of take up by FHBs - good on them. But competition for lower priced properties has seen price rises in this lower quartile already. Any continuation of the boost is just likely to cause a bubble in this one segment IMO.
Selfishly, I'd like to see it end too. PI's buy in this price sector and the sensible ones have pulled out in frustration at competing with FHBs that overpay. Some sense can come back into the market post 30 June if this were the case.
If the govt. is looking to put a floor underneath housing - then it has achieved its goals so far. Post June 30 I think the RBA cutting IRs will continue the job already begun.
Interesting view about the FHOG, after speaking with a few agents in my area (Macarthur) they all have said that house's under $450k are selling quick due to first home buyers.
Lets see what happends come June 30.
Alex Sperling, Dip. FS
I'd love to see the end of the FHB. Again purely for selfish reasons. I buy in the FHB bracket and boy is it tough.
The problem if the grant goes and prices in that bracket fall, to their normal level, is re-educating the vendors about the realistic price for their property.
It would be hard to say to someone in, say, August, "sir you wont get 290k for your unit, its only worth 250k" and then of course, "but my neighbour sold his in March and its not renovated, for 280k......"
but for me, its bring on June baby....
Like all free markets they are dynamic and constantly changing, so vendors will just have to adjust, may take some time but in the end, something is only worth what someone else is willing to pay.
Just my view of course.
Alex Sperling, Dip. FS
luvvit said: ↑
The problem if the grant goes and prices in that bracket fall, to their normal level, is re-educating the vendors about the realistic price for their property.Click to expand...Yes, yes, yes I was saying this today to our staff. Assuming FHO boost is pulled....June 30 you can get $400K and July 1 you get $350K for the same place. But the vendors will be expecting $400K and the market will take some time for the unrealistic vendors to come down to "meet the market" - this takes many months. So I think the market will 'stall' for a bit.