A new survey has shown that two-thirds of Australians believe that the Federal Government's first home owners grant is pushing up house prices.
Mortgage broker Loan Market Group found when they conducted an online poll that 35 per cent of consumers felt that the grant had inflated prices at the lower end of the property market, while 31 per cent felt it had not prevented them from buying real estate. But of the 633 consumers polled one in five stated the boosted grant had no effect on prices and 13 per cent thought that property prices had actually fallen.
As pat of its first stimulus package last October the Government doubled the first home owners grant to $14,000 for established homes and trebled it to $21,000 for new properties.
In the May budget the grant was extended until the end of the year, but it will be reduced back to $10,500 and $14,000 respectively from October 1st before returning to $7,000 for both categories on January 1st next year.
John Kolenda executive director of Loan Market stated that the grant has supported the market and even given it some boost, especially at the lower level, during the financial crisis. He further added that the residential real estate in Australia had so far weathered the worst of the downturn and that the grant had played a major role in supporting the market.
The combined effects of lower property prices, low interest rates and the boosted grant had created an environment in many more Australians have been able to afford a home.
The Government has announced that more than 97,000 people have taken up the boosted grant so far.
Data released in April showed that a record 28 per cent of home loans granted were taken out by first-time buyers.