Reply: 1
From: Nigel W
No answers yet...but these are some of my questions.
will this prolong the boom? or at least flatten out and soften any drop in the housing led economy?
IS there still enough demand to keep bringing forward by 1-2 years those first home buyers who haven't saved enough deposit?
Will the proliferation of "we'll double the govt grant" builders lead to people with negative equity out on the city fringes?
Is the grant just resulting in an artificial price stimulation of all property both new and old?
Is it actually not having much of an effect at all, with the dominant factor instead being record low interest rates and the plethora of house/auction/reno/lifestyle shows/magazines out now?
If supply can largely be increased only by building up or going to the city fringes (excluding the minimal effect of the knockdown and build option which is becoming popular in Sydney) what impact will this boost in demand have? Will it be largely irrelevant for the established house market as new buyers can't afford mid-inner suburbs even with the grant? Will it lead to an accelerated growth rate for inner suburbs units as the first home buyers chase a limited supply of old, large, solid units that have been refurbed? (gee I hope so!)
On a more macro level, is it good policy to artificially stimulate the housing industry with this grant until it becomes addicted to subsidies like a heroin user!? Is it time with increasing interest rates and the falling demand for new dwellings for some Darwinian evolution and survival of the fittest in the building indusry?
Would it be better for the economy as a whole for the weak builders and associated industries to be culled from the herd by elimination of the grant alltogether combined with an interest rate rise?
Is the grant just a trend accentuator within the broader industry and economic cycles?
Will the perceived end of double digit returns from the stockmarket keep pushing people into bricks and mortar investments?
where's that damn crystal ball?