More budgetary distortions
photo credit: night86mare
Fred Harrison will be proven correct with his apt title Boom-Bust 2010. With the Brumby government stepping up to the plate by offering further gravvy to the property lobby train with the $6000 increase in their First Home Owners grant, Natalie Craig reports that this will create another stampede:
REGIONAL builders say first home buyers are now waiting until after June 30 to sign contracts in order to get $36,500 in government hand-outs.
“We’ve seen a drop in demand probably in the order of 50 per cent,” Mr Fitz-gerald said. “The first home buyers were rushing in before June 30 to get what they could … now they’re wanting to hold off and get contracts in for the next period.”
The grants would still be “a great thing for real estate agents” and the construction industry…
When the Federal handouts stop on Dec 31st, this may be the signal for the land boom to final unravel in 2010. Unfortunately by then this will have seen over 180,000 young people manipulated into propping up the housing market at it’s virtual peak. Yesterday we calculated that this will see an annual $28 million dollar wealth transfer per year for the next 25 years from first home owners to the well-heeled property and banking industries.
Wealth divide anyone?
The only way to speed up affordable housing is to reduce the price of land. We can do this efficiently by placing holding charges on land so that developers like Mirvac don’t drip feed property to the market like they admitted on record. Find out how here.