$50,000 New Home Boost proposal.

nurbsenvi on 20/05/2020 - 23:17

https://www.smh.com.au/politics/federal/new-home-boost-50k-t…

"Buyers of freshly built homes would get a $50,000 cheque from the Morrison government under a $2.5 billion plan from the Property Council to kickstart the economy amid Reserve Bank warnings the housing sector faces an extended period of pain.

The council also wants the abolition of stamp duty, the broadening of the GST"

How will this scheme turn out?
Wouldn't it just drive the price of home higher?

What about all the renters who will decide to build home instead? Will the rental market be destroyed?

Home & Garden

Comments

  • jjjaar on 20/05/2020 - 23:31
    +1

    A lot of renters choose to rent (for life) because they want to live in certain areas that they can’t afford to buy in (inner city areas). New builds are usually only affordable quite far from CBDs. Many of the renters in the above category would not take $50k to move away from their desired locations.

    This scheme only exacerbates urban sprawl or encourages knocking down existing buildings that may be perfectly fine to live in (not a very sustainable outcome).

  • Gareth on 20/05/2020 - 23:51

    The reality of the competitive market is people pay as much as they can afford for what they need/want. Put another $50k in the budget, it just increases the competition (especially at auction) until that 50k is consumed.

    Rental market (for investors at least) is already on the way to destruction in the near future (CBA forecasting huge drops in house values, large numbers of interest-only loans coming up for renewal, inability to evict). The only thing that has been keeping it going is the shortage of housing. At some point, there will be a correction.

  • dcep on 21/05/2020 - 00:20

    so house price not going down then ..

  • StonedWizard on 21/05/2020 - 00:25

    Why do they keep offering incentive to people buying houses and not apartments?

    House and land packages are a rip off. Maybe if the developers actually cut some of their profits and made pricing reasonable, people would buy them.

    • Cluster on 21/05/2020 - 01:24
      +1

      Apartments tend to not be that much cheaper than houses a bit further away. And living on the 20th floor of an apartment in a coronavirus environment must have been fun. Every time you go outside you must ride in a tiny poorly ventilated box that a coronavirus sufferer may have been in seconds earlier.

      And with an apartment you own no land, and you better hope your builder doesn't construct another Opal or Mascot Towers. Good luck.

    • Logical on 21/05/2020 - 01:40
      +1

      Apartments are a bad investment when it comes to property. Body corp fees go up as building ages, you can not improve the property to any large extent eg extension, backyard haven etc. Can't install solar panels, solar hot water etc. You are stuck with higher utility bills. Building defects in apartments will see you relocate and suffer major costs vs house/land you can put a caravan there. You have your land which is physical space vs owning air space and 1/50 share of the land or worse if more apartments are on the block.

    • brendanm on 21/05/2020 - 06:40

      Apartments are terrible in so many ways.

      • StonedWizard on 21/05/2020 - 18:51

        @cluster @logical @brendanm - My points was, if they're talking about stimulating the industry and housing then they also need to do something for apartments.

        Not all apartments are a bad purchase, not all apartments have a 20th floor. Just because you buy a house, doesn't mean you're guaranteed a great investment.

        • brendanm on 21/05/2020 - 19:59
          +1

          It means I can smash my bathroom if I want, and I don't have to pay for repairs in someone else's wall.

        • Logical on 21/05/2020 - 20:52

          All apartments are a bad purchase.

  • Cluster on 21/05/2020 - 01:27
    +5

    Property Council wants more government handouts to keep house prices high. Insert shocked Pikachu face.

    But one thing is true in Australia: governments of all flavours will do absolutely everything to keep price growth. Anything else would plunge Australia into decades of stagnation. We have collectively bet everything on house prices always rising.

    • askme69 on 21/05/2020 - 09:48
      +1

      We have set ourselves up for multiple generations of pain and it will change Australia forever.

      Why do you think we need the immigration we currently have. It's only to prop up the Housing Sector.

      The GOV should take this opportunity to let if fail and start again.

  • EightImmortals on 21/05/2020 - 06:14

    "The council also wants the abolition of stamp duty, the broadening of the GST"

    Yes, the talk is they want to abolish stamp duty, which they promised to abolish when the GST was brought in, and replace it with 1) LAND TAX FOREVER and 2) More and more GST. hough the way the media reports it it sounds like a good idea. Beware government bearing gifts.

    • GG57 on 21/05/2020 - 12:47

      "The council…" is not the government.
      The government has not (yet) supported this.

  • tsunamisurfer on 21/05/2020 - 10:39
    +1

    Have the Government panels or think tanks not learned from FHOG?

    This will simply increase the price of the property.

    • GG57 on 21/05/2020 - 12:46

      The recommendation was not made by the Government; it is an industry body (with a lot to gain).

  • GG57 on 21/05/2020 - 10:55
    +1

    Some people commenting here seem to think that this is a government announcement. It was made by the 'Property Council'. That entity obviously has an interest in this 'policy' being adopted, and thus it's recommendation / statement.

    OUR VISION
    A THRIVING INDUSTRY CREATING PROSPERITY, JOBS AND STRONG COMMUNITIES

    OUR MISSION
    TO CHAMPION A STRONG PROPERTY INDUSTRY

  • Drakesy on 21/05/2020 - 12:41

    All subsidies result in the same thing more money in the pockets of developers/landowners. This should be kept to first home buyers as it's one of the few chances they might have of buying a property without defaulting.

    Having said that, propping up a failing industry by reinstating prices is outright stupid and will just prolong the bubble. I'm sorry scomo but a correction is needed and this will just cost Australia more money

    • GG57 on 21/05/2020 - 12:45

      The Federal government is not (yet) supporting this.

  • tsunamisurfer on 21/05/2020 - 12:50

    Remove all exemptions to the GST.

    • GG57 on 21/05/2020 - 13:25

      GST only applies on property sales where the seller is registered.
      Are you proposing that GST should apply on all sales of property?

  • stuarty9 on 21/05/2020 - 14:08

    Hmm interesting.. We are close to signing a contract to under-go a very large renovation and extension. I wonder if there will be anything for the renovating side of things. That is a large stake of the building industry.
    50k would be nice.

    • Logical on 21/05/2020 - 20:53

      No sorry, that's not logical.

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