Matt Cooper;
It is really quite simple.
In the 1970s the government was persuaded to force the lending banks
etc to lend on both incomes of the applicants.

Question; what happens in a market when the amount of money coming into
that market doubles for the same number of items being sold in that market ?

Surprise surprise, prices rise !
Now you know why housing became less affordable from the late 1970s
onward to today.

Yes, Mattcooper, and Bazz, precisely my points.
The problem has been created through cheap credit and lax banking regulation.
The first home buyers grant was (perhaps inadvertently) a ploy to deliver our children into the hands of the banks.
Rather like saying "there's a cage of wolves over there; here's a bucket of blood to carry in with you. That's sure to get you 'in' with them".
Rather than help first home buyers join a game where the opponents can (and do) change the most fundamental rule whenever they feel like it, why not give them a game where the rule (interest rate) is fixed, as rules are supposed to be?
As I understand it, the home owners grant is a gift; gone for good. A loan fund would be self funding, and cost tax payers nothing.

Grimm, I have not read the rest of the posts as I have no time left.

I have always maintained that governments (both) have got it wrong with the way they assist people into houses.

For a start. the grant should be an interest free loan and make it $50K, not $21K.

Now, there should be conditions set, such as, the home buyer must reduce their own loan annually, at a 'predetermined' level and can not re-draw on their own loan, or take a second mortgage unless they pay out the 'free loan' that has been provided by the tax payer.

Then, if they choose to sell their home, then the 'free loan' must be paid out fully as part of the settlement. Alternatively, they can stay put and enjoy the benefits of the interest free loan.

You see, there is a difference between a 'hand up' and a 'hand out'. At least this way the 'loan' remains an asset of the tax payer which can be re-used to assist further first time home buyers.

The trouble with the current system is that buyers in the past have taken this $21K 'hand out' and increased it '2,3,up to 5 fold and received this 'win fall' at the expense of the tax payer, many of whom were not eligible for the grant.

Way to solve the unemployment problem, rehctub.

>>Now, there should be conditions set, such as, the home buyer must reduce their own loan annually, at a 'predetermined' level and can not re-draw on their own loan, or take a second mortgage unless they pay out the 'free loan' that has been provided by the tax payer. Then, if they choose to sell their home, then the 'free loan' must be paid out fully as part of the settlement. Alternatively, they can stay put and enjoy the benefits of the interest free loan.<<

Can you imagine the number of public servants who would need to be recruited, trained, housed, salaried, superannuated and managed in order to research, create, publish, promote, administer and police a programme such as this?

Yum.

there was a sceme i mentioned a few months ago
it basiclly was a 'way' to house public servants
[one of them 'devine' scemes]

govt[from memory]..kicked in 50,000
and investers were required to sign exclusive leases
and hold loans of arround 220,000

anyhow it was a sceme[like all scemes]..to get devine investers funds as well as govt money]..litle wonder it was advertised on 'all music radio'..

other things that come to mind re this housing issue
are things like gst...was so govt would stop stamp duty on houses
and that shift of burden is great for investers[but not us mugs paying gst]

every govt sceme advantages some
and disadvantages the many

im of the old school [i bought my block off the govt
puttinmg up a 10 percent deposit..
then repaying 13 percent fixed intest rate by annual payment for 10 years

this is what govt should have done with the state forrests
[that they sold for 800 MILLION][for just under 40,000 hectares]

they could have preapproved many types of blocks
from small acreage to units and commercial
could easilly have built a small town

and cleared the FULL..65 billion debt govt has saddled us with as an excuse to over tax us for services and privatise our public assetsd..just with intelligent us with..*that land

[instead [you watch]..it will be gifted away to some shelf company..to be taken over in a few years by devine for pennies on the dollar][who will then do the same thing

and we will still be repaying intrest only on the 65 billion

Pericles, why not use your imagination here.

Your concerns are quite easy to address.

Firstly, the owners loan is a 'conditional loan' and the financial institution knows this which means it can not be redrawn on, nor can a second mortgage be placed on the home, unless of cause the restriction is lifted. Problem one solved.

Then, there are also things like 'caveats', if that's how it's spelt that restrict the sale (transfer) of the home unless this caveat is lifted. Problem two solved.

The third option is that we all go around with our heads buried in the sand and pretend it's all just to hard.

You choose!

You see giving people a 'gift' is not the answer as these ;gifts' can only be used once to benefit one person/persons.

It is typical of governments (note the plural) 'open cheque book' policies. I also think they to hold their heads in the sand and say it's all just a bit to hard.