From BS today the NSW Opposition has attacked the removal of FHB grants in NSW:
…”The disappointing figures follow (Premier) Barry O’Farrell’s decision to dump the $7000 First Home Owner Grant and end stamp duty exemptions worth up to $17,990 for first home buyers purchasing existing homes,” Mr Daley said.
“Instead, the government’s New Home Grant Scheme has paid 9802 grants to property investors and existing home owners buying a second property – further putting first home buyers out of the market.”
Under the changes, taxpayers’ money is “assisting property speculators”, Mr Daley said.
This is perverse stuff. Do you think reinstating the grant will help, Mr Daley? Mike Baird was right when he replied:
NSW treasurer Mike Baird said the government made the changes to increase the number of first home buyers purchasing new homes.
“Previous incentives to first homebuyers for existing properties simply increased mortgage sizes, as they increased demand without any boost to housing supply,” Mr Baird said in a statement to AAP.
But he went on:
“Increasing housing stock and choice will ease competition in the market and help to get more first homebuyers into the housing market sooner.”
Except for one small problem, Mr Baird, you do have a bubble on your hands with speculators absolutely hog wild chasing capital gains:
While not entirely Mr Baird’s fault (he can’t set interest rates or cut negative gearing), the supply response is too small, mismatched in apartments, and too late. What he could be doing is liberalising supply as a top priority of government.
