Friday, April 24, 2009

Home buyer grant a mistake

At last a politician who has the sense to tell like it is:

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 said. "

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.''

And he knows the real issue is supply not demand:

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.

Joe, can you please send a memo to your state counterparts.

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