In the last installment we discussed how the Government had decided to extend the First Home Buyers Grant and looked at the new figures that would be offered to first time home owners. But the grant affects more than just those who are buying new homes.
The Cost To The Government
The estimated cost to the Government to extend the time allotment for taking advantage of the grant is $539 
million. The Government is hoping that this money will help to stimulate activity in the housing and construction industries providing valuable jobs for electricians, plumbers, builders and other trades people. With the global economy in a downward trend the Government hopes that the extension of the grant will help to boost the Australian economy. The Government has received praise from housing and construction groups for the move as it is expected to continue to stimulate construction and provide jobs.
The Overall Effect Of The Government Stimulus Package
Since the inception of the first stimulus package offered by the Government last October over 60,000 first home owners have taken advantage of the free money and cashed in their payments. New building approvals were on the rise for the last couple months and the Housing Industry Association stated that the policy offered by the Government has provided a modest turnaround in building approval figures.
Not All Good News
For all the good news that is reported on the boost from the Government some people do not feel that it is as helpful as it appears to be. There are always two sides to every story. Figures from the Real Estate Institute have suggested that the boost has been inflating the prices of houses around Australia with the biggest impact being seen in the lower end of the housing market.
Property Options Australia
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Hi Sean,
I thought that the First Home Owners Grant might have been inflating the prices of houses at the lower end of the market. It kind of negates the advantage of giving people a government grant to get into their own homes.
Still, if it helps to stimulate the economy it may still be a good thing.
I like the fact that the goverment has taken the initiative to aleast try and address the problem of the difficulty first home owners have in entering the market. To those that don’t like the first home owners grant, I wouldn’t be too quick to cast stones. If people can’t house themselves then the Goverment must…at the expense of the tax payer.