Prime Minister thinks over first home buyer tax break

Tax breaks for first time home buyers is an idea worth looking into, Prime Minister John Howard says.
Mr Howard says he spoke with Aussie Home Loans boss John Symond two days ago about relieving the pressure on home buyers through tax cuts.
"Mr Symond made the suggestion that the $17.3 billion surplus could be used with $400 monthly payments to Australians struggling with housing affordability," Mr Howard said today.
"I'll have a look at it. I'm not saying yes or no at this stage, I am welcoming his contribution.
"He's a bloke for whom I have enormous respect."
Yesterday, Mr Symond proposed giving first-time home-buyers a tax deduction of up to $4725 per annum for five years on an annual home loan interest of $15,000.
Over the next five years, the home-buyers would pay back half the tax benefit.

Source: Newscorp

New homes provided for Sydney homeless

The New South Wales Labor Government is providing 30 new homes for homeless people in inner-Sydney.
The Minister for Housing, Matt Brown, announced the plan at the launch of Homeless Week this morning.
He says there are 27,000 people without permanent accommodation across NSW, but the majority are in rural and regional areas.
The chairwoman of Homelessness New South Wales/ A-C-T Lecia Kachyckyi has welcomed the initiative as a first step, but says the real crisis is in rural areas where there are less services.
"Because of the tyranny of distance, the scarcity of services in rural regional areas, you may have accommodation services, but you won't have the infrastructure to back that up around mental health, drug and alcohol, employment," she says.
"They are the issues that we also need to deal with, to deal with homelessness. It's not just about getting a roof over their head."
Source: ABC

House prices fall in Darwin and Perth

Darwin is one of just two capital cities to record a drop in house prices in the June quarter, which is more bad news for home owners in the Northern Territory.
The Australian Bureau of Statistics (ABS) has released figures showing established house prices fell by 1.4 per cent from March to June this year.
Perth is the only other city to have recorded a drop in the same quarter.
House prices in the west fell 0.9 per cent.
But in the year to June all capital cities saw an increase in house prices with Darwin recording a rise of 7.5 per cent.
Source: ABC

Doubling the first time home buyer grant is being talked about, but will it eventually increase housing prices?

Doubling the Federal Government's first home buyers grant would [eventually] increase house prices unless state governments release more land for housing, Finance Minister Nick Minchin said today.
The Real Estate Institute of Australia wants the grant to be doubled to $14,000 to give first home buyers a better chance of entering the market.
Senator Minchin said the move would drive up housing prices unless state governments released more land for housing.
"I do caution against those advocating doubling it (first home owners grant) because that will end up just feeding into prices and no one will be better off," Senator Minchin told the Ten Network.
"The trouble with that (doubling the grant) is that it adds to demand.
"You would not want to double the first home owners grant unless you were sure there was going to be a supply response at the state level."
Senator Minchin said state Labor governments are not responding to current housing demand.
"What you need is more houses built and more apartments built and the state Labor governments have the capacity to provide more land to allow that to occur and take the pressure off price," he said.
"We do continue to call for the state governments to respond to that need for greater supply of housing."
Aussie Home Loans CEO John Symond said doubling the first home buyers' grant was a bandaid solution that would not ease housing affordability.
"The doubling of the grant, I don't believe is a solution whatsoever," Mr Symond told the Ten Network.
"These are just bandaid jobs, the (housing affordability) summit on the Labor side, other suggestions – bandaid, bandaid, bandaid – they're not addressing the problem.
"The problem is that affordability in the housing industry is broken."
Mr Symond said both federal and state governments were responsible for the affordability crisis.
"The inaction of governments of all persuasions has really contributed to the affordability problem," he said.
"State levels – grabbing billions in taxes, stamp duties, being overly bureaucratic in trying to release land," he said.
"And federally – taking billions of dollars of windfall from the real estate appreciation and taxes.
"What have they (governments) done? They have really done very little."

Mortagge interest rate rises may happen for first time home buyers because of APRA changes, says PMI

First time buyers and low-income borrowers could face an interest rate hike as a result of new capital rules announced by the financial services industry regulator APRA, according to one of Australia's two providers of lenders mortgage insurance.
PMI Australia chief executive Ian Graham condemned the proposed changes announced by APRA on Monday, which reduce concessions for the amount of regulatory capital required to be held by lenders in support of home loans protected by LMI cover.
With less incentive to use LMI, lenders were likely to lift interest rates for the more disadvantaged borrowers, Mr Grahame said.
The changes to the capital rules governing home loans from banks, building societies and credit unions are part of the so-called Basel II accord.
Basel II aims to harmonise principles governing regulatory capital and how lenders manage risk, with the overall objective of reducing volatility in the global financial system.
Mr Graham said PMI was concerned that the Australian Prudential Regulation Authority had taken a too narrow view of the proposed changes.Source: The Australian

Real estate price boom dashes first time home owners' dreams

Rising real estate and house prices mean home ownership has become an unattainable dream for many workers on low-to-middle incomes, according to a new report.
Buying a median-price home almost anywhere in Australia requires a combined household income of about $100,000, but the average annual wage is $55,000 a year, according to the Beyond Reach report. The report, carried out by the Residential Development Council, revealed that not one of the 16 locations studied offered a median-priced home that was affordable on that income.
RDC executive director Ross Elliott said the research proved the housing crisis could have dire consequences.
"If key workers necessary for society and the economy to function are being denied entry to the housing market, or if the option of a single-income family is now completely shattered by the price of housing, we are faced with obvious long-term social and economic consequences," he said.
The warning comes as new figures show the property market in southeast Queensland is under rising pressure, with housing estates on the fringe of Brisbane and the Gold Coast bearing the brunt of population growth.
A five-year snapshot by the Australian Bureau of Statistics reveals the region swelled by 236,400 people (191,300 in Brisbane) in the period to the end of June 2006.
Many flowed into growth hotspots to the south of the city such as Parkinson-Drewvale, which almost doubled in population from 6300 to 12,200. Other areas to record strong increases included nearby Doolandella-Forest Lake (up 3800 people), Wakerley in the east (up 2400), Kuraby in the south (up 2200), and Seventeen Mile Rocks and Ellen Grove (both up 2000).
The data also reflects a surge in high-density developments close to the city.
On the Gold Coast, the populations of both Kingsholme-Upper Coomera in the north and nearby Pacific Pines-Gaven more than doubled.
The local government areas of Pine Rivers and Caboolture recorded population increases of 22,600 and 21,000, respectively, over the five years.
Outside the southeast corner, Wide Bay-Burnett and far north Queensland had the largest growth.
The state's northwest, central west and southwest all experienced population declines.
With the affordability of housing set to be a major federal election issue, Mr Elliott said RDC research had identified lack of land supply, excessive up-front fees for home buyers and delays in town planning as key contributors to the crisis.
He said a high-level group was needed to bring all levels of government together to tackle the issue.
"The Federal Government cannot stand by and watch the future economic prosperity of a generation of Australians ruined by the policies of state and local government," he said.
The RDC is the national residential advocacy arm of the Property Council of Australia.Source: Courier Mail