Fed: First home buyer grants could be a mistake: Hockey

AAP General News (Australia)
04-24-2009
Fed: First home buyer grants could be a mistake: Hockey

CANBERRA, April 24 AAP - First home buyer grants would be judged a mistake if those
taking them out subsequently lost their jobs and defaulted on the loans, the opposition
says.

Shadow treasurer Joe Hockey said there was also legitimate concern that the grants
might be pushing up the price of housing.

He said there was need for caution as the government and everyone else was predicting
a rise in unemployment of up to 300,000 people.

"I would hate to see that those people being encouraged to go out and buy their first
homes and are going to end up unemployed in the next 12-18 months," he told ABC Radio.

"It might be great to stimulate and distort one part of the economy.

"But if it means that those poor buggers are going to end up unemployed and default
on their home loan in 12 or 18 months time through no fault of their own, then this will
be seen to be a mistake."

New Limited reported today that the federal government was considering extending its
enhanced first home-buyers grant beyond June 30.

The grants scheme could be revised in the May 12 federal budget to favour new home
construction over purchases of existing homes, they said.

The scheme was a $1.5 billion inclusion in the $10.4 billion economic stimulus package
announced in December last year. The grant to first-time buyers of existing houses was
doubled to $14,000, and tripled to $21,000 for those buying new housing stock.

Mr Hockey said all the grants did was increase housing prices unless there was an increase
in housing stocks.

"We don't know whether there has been a sufficient increase in the amount of housing
provided to meet what has stimulated demand," he said.

AAP mb/ss

KEYWORD: HOME HOCKEY

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