Low rates, bigger grants but land needed

Submitted 2/12/2008

Migration for Business Growth

 

The home building sector will not gain the full benefit of falling interest rates and a tripling of grants for first home buyers unless more land is released, a new report says. Land values have soared in recent years in the face of restrictive land release polices and burgeoning planning delays, jumping 106 per cent in the past six years. The Reserve Bank of Australia is expected to make another large cut to the official cash rate when its board meets tomorrow. Official rates have so far dropped 200 basis points in the past three months, a large part of which has been passed on to mortgage rates. At the same time, the Federal Government has doubled the first-home-owner grant for purchases of existing properties to $14,000, and tripled it to $21,000 for new homes, as part of its $10.4 billion economic stimulus package. -- AAP