The Australian Federal Government has extended the deadline of the First Home Owner Grants (FHOG) in its Federal Budget ’09.
The grants, which currently stand at $14,000 for established homes and $21,000 for new homes, will be extended at the current level for three more months.
The grants will remain the same between 1 July and 30 September, but between 1 October and 31 December 2009 eligible first home buyers will receive just $10,500 for established homes and $14,000 for newly constructed homes.
Federal Treasurer Wayne Swan said the grants were a success, and helped the property market survive tough economic conditions, and numerous property experts have praised the increased first home owner grant for “propping up” housing affordability.
Tim Lawless from RP Data and David Green-Morgan from DTZ Research have both said the boost has helped the Australian property market survive drastic falls seen in countries such as the United States.
I, on the other hand, am less impressed. It is a temporary solution which, whilst I accept is appreciated by some right now, it is only further inflating already bloated prices, as well as providing inaccurate and short-term property values.
So what happens after it’s removed? Are we just being built up for a bigger fall? The inevitability of it is frightening.