Readers: 43
Publisher: petrica
Date added: 12 Apr 2009
As the development industry called for an extension of the $14,000 grant to all homebuyers to stimulate a dormant market, Reserve Bank deputy governor Ric Battellino warned the funding could backfire.
Analysts also forecast a potential housing crisis later this yearwith rising unemployment pushing up to 460,000 households close to theedge through mortgage stress.
Mr Battellino said the $21,000 available to first-home buyers could end up being priced into the cost of the home.
It doesnt take long for the average house price to increase by$20,000 and leave the buyers no better off, he said. Forecasts werefor a substantial rise in unemployment, he added.
Human Resource manager Emma Holmes, 26, moved into her first home, aunit at Seaton, less than two weeks ago and described the grant as amassive boost.
It was great because it basically covers stamp duty and fees, the sorts of costs that creep up on you a bit, she said.
Id hate to see it not around after June, because too many people will miss out.
Stock market analysts ABN Amro said the first-home owner segment was becoming inherently risky.
The confluence of artificially high housing prices, lack of savingsrecord and higher unemployment risk makes the first-home buyer segmenta high-risk segment, he said.
Economists Fujitsu Consulting said it expected to see a significant rise in mortgage stress this year.
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