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First home-owners grant could lead to housing bubble, Commonwealth's Ralph Norris say

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  • First home-owners grant could lead to housing bubble, Commonwealth's Ralph Norris say

    The Australian - March 18, 2009 12:00am

    COMMONWEALTH Bank chief Ralph Norris yesterday warned that the Rudd Government's first home-buyer grant could lead to a residential property bubble if it became a permanent fixture in the housing market.

    Most home lenders and brokers are pushing for an extension to the incentives, which include grants of $21,000 for new dwellings, beyond June when they are due to end.

    Mr Norris warns that such a move could tempt borrowers with little capacity to repay debt to enter the market.

    "I think the first home buyer grant has provided quite a stimulus to the market," he said.

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