Rate rise could hurt first home buyers

The opposition has stated that increases in interest rates could push thousands of recipients of first home buyers grants close to default.

Joe Hockey opposition treasury spokesman stated that he was concerned about people that had received grants up to $21,000 when interest rates were at an all time low, and that they would find it extremely difficult to meet their commitments when rates were to go up.

The Australian Bureau of Statistics recently released new figures showing that the value of new home loans fell by 2.3 per cent in July, compared with the previous month.

Interest Rates will definitely go up

As the Reserve Bank and the Government have stated in recent weeks that rates will definitely go up again, Mr. Hockey told the Australian that the Government needs to pull back on economic stimulus spending to reduce the upward pressure on rates.

Mr. Hockey also stated that the greatest risk for first home buyers next year would be rising unemployment and higher interest rates.

Tanya Pilbersek the Federal Housing Minister felt that the first home owners boost was supporting local jobs and that a strong housing market was critical for boosting jobs in the Australian economy.

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Published on September 9-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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