First Home Buyers get a helping hand from governments in Australia

A First Home Buyer is in the box seat with the Federal Government's increase in the first home owners grant from $7000 to $14,000 (for a first home buyer purchasing an existing dwelling ) and to $21,000 (for a first home buyer buying a newly constructed property.)In its November 2008 mini budget, the NSW State Government provided another "kicker" by making a further $3000 available as a grant to a first home buyer purchasing a newly constructed first home or unit. Originally this NSW grant for a first home buyer was for $7000 but it now totals $10,000. The only qualification seems to be that the grant is means tested and will not apply where the cost of the first home buyer purchase exceed $750,000. Research indicates that only around 4% of the first home buyer market is in a position to purchase a property with a purchase price in excess of $750,000. At the end of the day it seems reasonable that the taxpayer should not necessarily be supporting a first home buyer who is sufficiently well off that he or she can afford to buy in the high end of the real estate market. In addition to these grants a first home buyer in NSW is now exempt from stamp duty on their purchase provided the first home buyer is purchasing for less than $500,000. This is a significant saving of up to $17,990 (calculated on a first home buyer maximum purchase of $500,000).Combining this maximum State Government stamp duty exemption with the other Federal and State Governement grants a first home buyer who buys property worth $500,000 can receive as much as $41,990 to the cost of purchasing a new home.The $3000 increase for a NSW first home buyer is effective from Tuesday November 11th and will run for one year, after which it will be reassessed in the context of the property market. The first home buyer grant increase should assist around 3000 first home buyers into new properties. It is hoped that this increase will stimulate "first home buyer construction". The first home buyer market which to a large extent drives new construction in NSW has declined recently because of global credit crisis fears and the escalating interest rates they were predicted as recently as Ausgust. Without positive steps to revive the construction industry it is likely that unemployment in this sector will escalate. To avoid this scenario and the greater liklihood of a recession, both the Federal and State governments have endeavoured to support the industry by increasing the grants to the first home buyer. In NSW the supply and demand of residential housing is out of kilter with the real estate institute suggesting that the demand for dwellings (including first home buyer demand) exceeds the number of homes being built or coming on to the market as other property owners upgrade to larger or more expensive homes. Suggestions are that net migration figures for NSW require an additional 20,000 homes with the demand now exceeding supply by over 20,000 more homes per year than are currently available. For this reason first home buyer house prices have not fallen drammatically and for many a first home buyer it has been too expensive (especially when costs are brought into the equation) to but in Sydney metropolitan area. With interest rates falling and the additional grants perhaps the first home buyer will be back in the market. --Austral Mortgage offers competitive rates for first home buyer,investment loan anddebt consolidation.Source:

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