Last night's Federal Budget 2009 announcement of the continuation of the first home buyer boosts has led to a sigh of relief for the real estate industry, and those first home buyers who had been rushing to sign contracts before the new financial year after the included the extension of the boosts, as can the real estate industry.
The extension of the increased grants has certainly been highly anticipated, and greatly discussed and lobbied, and there was definite concern that the market would experience a downturn if the boosts had not been extended. The extension and shows that the Government is carefully considering the state of the property market, which is a good sign for those of us involved in it, such as myself! The continuation of the boosts will certainly act as a motivator for even more first home buyers to get back into the property market, and that's good news for the real estate industry.
It is indisputable that in the face of global economic instability and reports of real estate prices and markets crashing internationally, that the boost has helped bolster our market here in Australia. Already around 59,000 Australians have bought their first home with the assistance of the grants, and the newly announced six month stimulus package is estimated to be costing the Government $539 million over three years. An extra three months of the full boost up for grabs is bound to motivate those who had been hesitating.
I believe the reduced extension after that will still act as a motivator for those considering entering the market to do so. It will hopefully also have the effect of encouraging market activity for a longer period, with the flow on effect of helping to stimulate construction and other related industries.
With the full boost now available until 30 September, first home buyers have another three months up their sleeve to take advantage of the largest grant available - they will continue to receive the boost of $7000 in addition to the First Home Owners Scheme Grant, providing them with $14,000 for the purchase of established homes, and $21,000 for the purchase of new homes.
After this date, those first home buyers entering the property market will be eligible for half the boost until the end of the year. In dollar terms, this means first home buyers entering contracts for established homes between 1 October and 31 December will receive $3,500 and those buying new properties will receive $7,000 in addition to the First Home Owners Scheme Grant.