First Home Buyers Be Aware

Written by Stephen Outram Monday, 10 October 2011 08:57

Are you being suckered by government funded First Home Buyer Grants?

My interesting point-of-view is that governments offer money incentives to first home buyers to boost a failing housing market. The key objectives are not to create greater ease, particularly for young people desiring their own home home, but to:

• prop-up a deflating housing bubble
• protect banks that are exposed to housing and
• sustain jobs in a struggling contruction industry.

People, who are not even able to raise a deposit, are lured into buying homes they cannot really afford. This provides a short-term boost to the economy and makes the government look good; but in the medium-term many young people may lose their home and sink deeper into the sticky mire of debt.

"Almost half of first-home buyers lured into the market by the Rudd Government's $14,000 grant are struggling to meet their mortgage repayments and many are already in arrears on their loans." The Courier Mail January 31 2010.

Nick Gardener in his 2010 article, "First Home Buyers Struggle as Interest Rates Rise," reports on results in Australia, of the 2009 grant system introduced by the Rudd Government. Recently, in 2011, Julia Gillard's Government has created a similar offer.

Please, those of you who are tempted, the government is not doing you any favours. Consider your future ability to make mortgage payments, particularly when interest rates rise as central banks try to manage inflation and the growing economic challenges of FIAT currency systems.