Prime Minister Kevin Rudd has confirmed what had been previously anticipated that the first home buyers grant will not be extended past the deadline of June 30.
Sky News reported that Mr. Rudd stated in a Perth speech that, that would conclude in a very fixed and limited timeframe.
The Prime Minister went on to say that the first home buyers grant had its desired effect and that the government was still measuring its full effect, but that it was very important to understand that deadlines were imposed for a particular purpose.
Under the Government's $1.5 billion first home buyer's boost, the first home buyers grant was doubled from $7,000 to $14,000 last October. The first home buyers who purchased a new home were fortunate to receive an extra $7,000 to take the total cost of government assistance to $21,000.
Construction and real estate industries have applauded the boost and some have asked for it to be continued. Some have voiced fears that if the grant is removed the real estate market will collapse.
One expert has stated that it is actually record low interest rates and a softer housing market, and not the grant that has spurred on many of the first home buyers.
Figures have shown that by the end of last month more than 42,000 had taken up the grant.
NSW had the most with 14,404 first home owners receiving the boost, followed by Queensland and Victoria with 9,319 and 8,632 respectively. About 4,200 first home buyers entered the market in Western Australia since October, and more than 3,300 from South Australia and 1,135 from Tasmania. Both territories recorded the lowest uptakes with 703 grants awarded in the nation's capital and 404 in the Northern Territory.
Some people have speculated that the first home buyers grant is leading to be a home loan time bomb with some first-time borrowers taking out larger loans than they can afford. The average loan grew by 22 per cent from $230,000 in March last year to about $281,000 this month.