http://www.reinsw.com.au/Reintroduc...ant-for-existing-property-REINSW/default.aspx
So what do you all think? Is a re-introduction a good idea?
So what do you all think? Is a re-introduction a good idea?
Bringing back the FHOG?
- Thread starter Jacque
- Start date
In my opinion any government interference, whether grants or any other incentive, distorts the market straight away. In fact any government interference, I think, has the opposite effect of what was intended.
The FHOG grant and the FHOG Boost had the effect of doubling the house prices in that price range. Together with easy lending house prices then more than doubled.
First home owners paid the price.
The FHOG grant and the FHOG Boost had the effect of doubling the house prices in that price range. Together with easy lending house prices then more than doubled.
First home owners paid the price.
There a both negatives and positives with government incentives.
The positive, increasing grants and incentives creates more home sales. In turn, this stimulates the economy.
Example: Jacque’s client buys a house from me (they pay full price
). Afterwoods they want to get new carpet & paint; they employ a painter and a carpet layer. Painter buys paint, carpet layer buys carpet. Solicitor gets paid, pest and building inspectors get paid, Jacque gets paid and I get paid. Jacque buys new shoes, I spend my money down the local club and go out for dinner at darling harbour, maybe throw some money on black at the casino etc… The circle of life continues.
The negative aspect is home prices rising beyond a point where they can be resold for the same value. I remember a couple of years ago when the first home buyers grant was $14,000 for existing homes and stamp duty was exempt.
To date, this time was my best year in real estate. Buyers went crazy, anything we listed was sold in days. I look back now at many of those buyers and know there is no way they could achieve the price they paid. To make things worse, many of them were borrowing 95%, some higher.
As we saw in America, this type of inflation in home prices can create a real estate bubble.
At present, the Sydney market is good. We’ve knocked all our stock off since mid December. We now can’t find enough to sell. I was predicting doom and gloom when all these incentives were taken away. Luckily, I’m wrong on rare occasions.
And really, at the end of the day it’s all relative. If you sell in a seller’s market that may sound great, but it also means you will be buying in one too. The market coming back 10% might sound horrible, but it means you get 10% off when you buy (offcourse this is only relevant to someone selling and buying within the same area).
So, I agree with AXXO. But I wouldn’t complain if FHBG was reintroduced.
The positive, increasing grants and incentives creates more home sales. In turn, this stimulates the economy.
Example: Jacque’s client buys a house from me (they pay full price
). Afterwoods they want to get new carpet & paint; they employ a painter and a carpet layer. Painter buys paint, carpet layer buys carpet. Solicitor gets paid, pest and building inspectors get paid, Jacque gets paid and I get paid. Jacque buys new shoes, I spend my money down the local club and go out for dinner at darling harbour, maybe throw some money on black at the casino etc… The circle of life continues.The negative aspect is home prices rising beyond a point where they can be resold for the same value. I remember a couple of years ago when the first home buyers grant was $14,000 for existing homes and stamp duty was exempt.
To date, this time was my best year in real estate. Buyers went crazy, anything we listed was sold in days. I look back now at many of those buyers and know there is no way they could achieve the price they paid. To make things worse, many of them were borrowing 95%, some higher.
As we saw in America, this type of inflation in home prices can create a real estate bubble.
At present, the Sydney market is good. We’ve knocked all our stock off since mid December. We now can’t find enough to sell. I was predicting doom and gloom when all these incentives were taken away. Luckily, I’m wrong on rare occasions.
And really, at the end of the day it’s all relative. If you sell in a seller’s market that may sound great, but it also means you will be buying in one too. The market coming back 10% might sound horrible, but it means you get 10% off when you buy (offcourse this is only relevant to someone selling and buying within the same area).
So, I agree with AXXO. But I wouldn’t complain if FHBG was reintroduced.
FHOG have been around for too long IMO. They should maybe exist for 6 months when needed. Now it is a must when purchasing to buy only if you can receive a grant.
However it will be interesting if in NSW it goes back to existing stock when the lack of stamp duty revenue hits the already broke state government.
However it will be interesting if in NSW it goes back to existing stock when the lack of stamp duty revenue hits the already broke state government.
