First Home Buyers Homeless

The median price for housing is slowly creeping up in all suburbs, and this is slowly edging out first home buyers who are now finding it very hard to enter the market. As from December 31st 2009 the First Home Owners Grant dropped down to $7,000, and with house prices rising this had the effect of putting the brakes on home sales.

The reason for this is quite simple, the First Home Buyers underpin the market and that is a fact. If the first home buyers can not buy that first home then everything stalls.

As an example: You have a vendor that is trying to sell a home that is on the market for $230,000 so they can buy their next home. Before the median prices went up that home would have been lets say $215,000 and with the First Home Owners Grant of$14,000 for an established home (more for a new home) from the Federal Government and $4,000 from The State Government it was well affordable for the first home buyer. Now that same house has gone up in price and the First Home Owners Grant has dropped, the banks (who I might add were propped up with tax payers money) have made it a lot harder to secure a home loan so the first home buyer can not now afford to buy that same house. The vendor trying to sell the house now faces a very strong possibility that they may not secure their next home, so now you can see why the first home buyers are the first link in the real estate chain.

I think it is time for the Federal Government and the State Governments to sit back and have a serious look at the very serious situation that the first home buyers are in.

Investors are finding it very hard to enter the market as well because of the banks raising the bar for home loans qualifications, I think it is about time for the banks to repay the Australian taxpayers for propping them up in the Global Financial Crises (which in the end proved they did not need it) because they after all a business and next time should be looked at like a business and if they go broke well so be it.