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Insiders say first homeowners scheme will be extended in the May Budget
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http://www.news.com.au/story/0,27574,25378732-5012587,00.html
* Govt to extend homes grant, sources say
* Rudd says it must come to and end
* Industry says clarification needed
KEVIN Rudd has hosed down suggestions the boost to the first home owners grant will be extended, despite sources saying it will continue.
In an unexpected boon for new buyers, insiders told The Daily Telegraph the Federal Government will extend the first homeowners scheme in the May Budget.
But the Prime Minister poured cold water on the idea this morning, reiterating his comments from earlier in the week indicating the boost to the grant will end on June 30.
"All good things must come to an end," he said, refusing to speculate further on what he called a Budget matter.
His comments prompted the Liberals to attack him for "cruelly teasing" couples weighing up their purchasing options.
The Housing Industry Association said Australians deserved to be told what was going to happen beyond the June 30 deadline.
"There's certainly an argument for clarification in the not-too-distant future on what is going to happen," he said.
The HIA said an extension to the boost on new homes would be far more effective than continuing the one on existing homes, which fuels price pressures and "advantages no one but real estate agents".
Boost will continue, but not as we know it
Sources told The Daily Telegraph the popular subsidy scheme would be renewed, in a slightly changed form favouring new building.
Grants were increased by $1.5 billion last December in the first $10.4 billion economic stimulus package. The handout to first home buyers of existing houses was doubled to $14,000 and tripled to $21,000 for those buying a new house.
The NSW Government added an extra $3000 for those buying new builds or constructing their own home.
The additional grant money was scheduled to be available until June 30 and yesterday Mr Rudd seemed to indicate that cut-off point would prevail.
"We should all underline the fact that all good things at some stage come to an end," Mr Rudd said in Perth when asked about the scheme's future.
But he also talked up the effectiveness of the program, saying it had added to economic confidence and boosted "jobs for our tradies".
It is understood Mr Rudd was attempting to repeat a form of words that avoided comment on whether the scheme would be renewed in the Budget on May 12.
Although insiders have revealed it will be extended, Liberal housing spokesman Scott Morrison - who supports such a move - yesterday accused Mr Rudd of "weasel words" and said he should speak out.
Mr Morrison said the Prime Minister should declare now the scheme's fate and stop a "cruel tease" of young buyers. "This is placing young homebuyers under terrible pressure," he said.
Plummeting interest rates and the increased subsidies helped make first home buyers take a record 26.9 per cent of all new home loans in January. And figures showed loans to new buyers rose 5.6 per cent in January, with commitments for new homes up by 2.5 per cent.
"The decision last October to increase the grant had resulted in the real estate market being one of the few parts of the national economy that was still active," John Kolenda, of mortgage brokers Loan Market Group, said.
"We have been urging the Government to extend the boost to the grant for another six months in order to maintain that vibrancy."
But Opposition Leader Malcolm Turnbull continued his attack on the Government's economic stimulus strategy as wasteful spending creating huge debt and no jobs.
-With The Daily Telegraph |
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