Aussies may have overpaid by $50,000 on their First Home

If you were not aware, the Australian Govt has been quite generous over recent years in assisting folk, predominantly younger ones, into their first home.

Their main vehicle has been the First Home Owner Grantwhich provides for a lump sum, oftentimes a very decent lump sum of dollars………….indeed a good chunk of the deposit, towards the purchase of same.

Strangely enough, many Kiwis also took advantage of the scheme.

In more recent times, this grant accelerated quite considerably if your purchase was a brand new home under the proviso that you were that homes first owner.

Over the last decade there has been some lobbying for the NZ Govt. to adopt a similar stance. (similar to the USA last year their $15,000 helper, stimulus, etc …..well they call it a tax credit when I discussed it here a year ago)

28-02-2010 8-17-55 p.m.

However in sobering news this week from Aussie Home Loans main man, and reported as such by News Corps’ “Herald Sun” yesterday, is the claim that courtesy of this grant, Aussie John is of the opinion that first home buyers may have spent up to $50,000 more than they would ordinarily have done so.

Aussie John should know, after starting out in the 90’s and then riding a couple of cyclical waves, hes in the enviable position that he is still successful** and hasn’t succumbed like many of the so called “successful high fliers” of this past decade.940808_maze__5

And just as puzzling and attractive as a hole in the head, you can imagine how happy Aussies & Kiwis are to hear about things that make them pay more for a home…………..especially their first one?

Unfortunately for the doubters, I think Aussie John is on to something, and justifiable in his way of thinking.

There was a monster fear from the Real Estate community in OZ that once the grant ended, a detrimental effect would take place on property prices in its lieu.

However this was an Australian expressed opinion.

Serendipitous is definitely what I’d call it.

CREDIT ABOVE GRAPHIC – Australian Financial Review (AFR)

I think this weeks headline sort of hints about the OZ situation.

History, as far as the “numbers” are concerned, may prove me wrong………..but there are 2 major reasons why particularly in Australia’s case, it may probably do just that.

CREDIT – ABOVE GRAPHIC – “West Australian” Newspaper 23rd Feb 2010

Australia is in boom time.

1] the fact that Australia has recently emerged as one of the world’s strongest economies


2] the fact is the stuff that they have…… the stuff that the rest of the world wants now…..…and is still prepared to pay top dollar for it now in 2010 dollars for future use…….is just so great that it will surely maintain a growth pattern that many other world players would dream of……and in their wildest dreams too.

CREDIT – ABOVE GRAPHIC – “West Australian” Newspaper 23rd Feb 2010

So it will be interesting to see if, in some pockets of the country, this thus transpires…..but I can just about guarantee you, that any reduction in property prices won’t happen quickly in places like Kalgoorlie, Port Hedland, Weipa or similar industry location towns. My advice…… any bargains you see in those same towns……………TOMORROW!

** – successful – hmmm….well he still has that Aussie dream – the multi-million dollar McMansion to call home.