THE Rudd Government is facing mounting pressure to continue its grant scheme for first home buyers, as the Opposition demanded certainty for those looking to enter the market.
Industry groups are warning that now is not the time to end the increased grant because of deep cuts to economic growth forecasts.
The grant was raised from $7000 to $14,000 for existing dwellings and from $14,000 to $21,000 for new homes as part of the Government's $10.4 billion stimulus package last year.
The increase is due to expire on June 30.
"The first home owner's boost, as you know, we have indicated that will conclude within a very fixed and finite time frame," Prime Minister Kevin Rudd said.
"It's had strong, useful results so far, but I have got to say all good things must come to an end."
Mr Rudd said the Government was still measuring the full effects of the boost but it was important the community understood deadlines were imposed for a particular purpose.
Official data has shown first home buyers have been rushing into the housing market to take advantage of the grant, as well as low mortgage rates with the Reserve Bank of Australia's cash rate at a 49-year low of 3.0 per cent.
First home buyers account for a record 26.9 per cent of all new home loans granted as of February.
Opposition housing spokesman Scott Morrison urged Mr Rudd to provide certainty to young Australians by immediately announcing a decision on the increased grant.
"The Prime Minister can only come up with the irresponsible line that 'all good things must come to an end' when first home buyers are trying to plan for their futures," Mr Morrison said.
"Kevin Rudd's weasel words will only add to the stress of first home buyers who are already having to deal with significant delays as increasing numbers of applicants attempt to access the boost before June 30."
Mortgage broker Loan Market Group warned the residential property sector faces a major setback if the increased grant ends as scheduled.
"The decision last October to increase the grant had resulted in the real estate market being one of the few parts of the national economy that was still active," Loan Market Group executive director John Kolenda said.
"We have been urging the government to extend the boost to the grant for another six months in order to maintain that vibrancy in the market.
"If they don't there's a risk of the continuing recovery in the property market being set back after the boosted grant expires."
The Urban Development Institute of Australia (UDIA) said a worsening domestic economy and rising unemployment reinforces the need for the grant to be extended.
"New development and construction activity creates significant benefits for the Australian economy," UDIA national president Stephen Holmes said.
"The development and housing industry has demonstrated that it can deliver economic benefits quickly and effectively when buyers are stimulated to enter the market."
Mr Kolenda said the Government should at least consider continuing the $21,000 grant for new homes, or adopting the Northern Territory government's Buildstart scheme, which provides $14,000 to buyers or investors building a new house.
Source
Jenny
Industry groups are warning that now is not the time to end the increased grant because of deep cuts to economic growth forecasts.
The grant was raised from $7000 to $14,000 for existing dwellings and from $14,000 to $21,000 for new homes as part of the Government's $10.4 billion stimulus package last year.
The increase is due to expire on June 30.
"The first home owner's boost, as you know, we have indicated that will conclude within a very fixed and finite time frame," Prime Minister Kevin Rudd said.
"It's had strong, useful results so far, but I have got to say all good things must come to an end."
Mr Rudd said the Government was still measuring the full effects of the boost but it was important the community understood deadlines were imposed for a particular purpose.
Official data has shown first home buyers have been rushing into the housing market to take advantage of the grant, as well as low mortgage rates with the Reserve Bank of Australia's cash rate at a 49-year low of 3.0 per cent.
First home buyers account for a record 26.9 per cent of all new home loans granted as of February.
Opposition housing spokesman Scott Morrison urged Mr Rudd to provide certainty to young Australians by immediately announcing a decision on the increased grant.
"The Prime Minister can only come up with the irresponsible line that 'all good things must come to an end' when first home buyers are trying to plan for their futures," Mr Morrison said.
"Kevin Rudd's weasel words will only add to the stress of first home buyers who are already having to deal with significant delays as increasing numbers of applicants attempt to access the boost before June 30."
Mortgage broker Loan Market Group warned the residential property sector faces a major setback if the increased grant ends as scheduled.
"The decision last October to increase the grant had resulted in the real estate market being one of the few parts of the national economy that was still active," Loan Market Group executive director John Kolenda said.
"We have been urging the government to extend the boost to the grant for another six months in order to maintain that vibrancy in the market.
"If they don't there's a risk of the continuing recovery in the property market being set back after the boosted grant expires."
The Urban Development Institute of Australia (UDIA) said a worsening domestic economy and rising unemployment reinforces the need for the grant to be extended.
"New development and construction activity creates significant benefits for the Australian economy," UDIA national president Stephen Holmes said.
"The development and housing industry has demonstrated that it can deliver economic benefits quickly and effectively when buyers are stimulated to enter the market."
Mr Kolenda said the Government should at least consider continuing the $21,000 grant for new homes, or adopting the Northern Territory government's Buildstart scheme, which provides $14,000 to buyers or investors building a new house.
Source
Jenny