Plans to make homes $20,000 cheaper

Is government intervention the solution to the housing affordability crisis and something that investors should fear?

First Home Buyers Grant a case in point.

Land releases, the search is on to find all available land for housing.

State governments are under pressure to spend $1 Billion PA on public housing or else. 

Is cutting development red-tape (reform) essential to reducing the crisis.

What else can the federal government do to avoid further interest rate rises?

Has there even been a time like it?  Does intervention lead to greater intervention?

Opportunity in Everything

Here's my take and I am climbing into my flame suit as I write it.

I don't think the government should be held responsible for providing affordable property.  Accomodation yes, property no.  People need to stop thinking that they are 'owed' a choice of nice houses in nice metropolitan suburbs that can be bought with a first home loan.

There are a lot of other investments that are out of reach of the average Joe, but no-one is calling for the Govt to make them more affordable!  Why should it be different for houses?  The performance of the housing market is evidence of a strong economy and good financial policy for the Government, for which they should be commended if you ask me.  Any effort to artificially make housing 'affordable' will just upset the market balance and benefit no one.

But you can't live in other investments you say, everyone needs a home, a man's home is his castle etc.  So rent!  Save the money you would have paid into a mortgage and when you have enough, invest it.  Invest in something that you have considered on its financial merits ONLY, not clouded by the emotions of find a 'home' to nest it.

/rant over!

 emotional vote catcher
its not about helping any one but the poly's to get some votes from the gulable

O.I.E,
The only time I can remember when the Govt caused house prices to be cheaper was when they stopped neg gearing on I.P's as a tax deduction back in the '80's. There was a fairly bad correction of house prices, and as all the investors were off-loading their non-tax deductible neg geared I.P's, there was a massive shortage of rental properties which caused the rents to skyrocket.
Nice one Paul and Bob.
They reversed the decision not long after this thank god.
Every time they introduce a new scheme to help out the first home buyers, or to generally try to keep prices down for all, it results in more cash available to buy houses, so then there are suddenly more people around wanting to buy with more money to spend. Demand is then on the increase, but stock doesn't always follow suit, and so the prices go up and absorb any of the 'savings' handed down from the suits. Good for investors - more cap growth.
The Govt should stay out of it, other than to cut back on stamp duty (good luck - too much of a cash cow).
Cutting back Stamp Duty won't make houses more affordable really, but it will at least get rid of some of the disgraceful rort that stamp duty is.
If it wasn't for the stamp duty from the last boom, Bracksy would have REALLY stuffed up the Vic economy. He did well despite himself.
Don't get me started on the water shortage - what's a dam? Thanks Bracksy and Thwaitesy. I know; let's hope it rains a lot.

As for the interest rate rises; I think it is out of the Govt hands; with our consumer economy continuing to roll along like an out of control train, the fed has no choice but to keep putting up the rates a little every few months to slow everyone down.
And of course; Xmas is only a couple of months away - more maxed out credit cards in Jan. That will cause another rae rise in Feb I'm guessing.

The other possible solution is what is happening here in the US; so many people over-extended and continuing to do so; they go broke, have to foreclose the house, the housing market stalls, the people can't spend as much (but god, they find ways to keep trying) and the economy slows. No more interest rate rises for a while.

.

Cheers,
Marc.
erardent@hotmail.com

"we get sent lemons; it's up to us to make lemonade"
www.whydoislice.com - for all the golfers out there!