Boost for city sprawl
Published in the Geelong Advertiser, May 2013 by Dale Gillham
In an effort to pump up the housing industry and offset the slowdown in the economy, the Victorian Government has increased the First Home Owner Grant.
I question whether this will achieve anything other than force families to move further out from the city and put pressure on resources by increasing the urban sprawl.
Today, people want to have access to good roads, public transport, shopping and entertainment and don’t want to have to wait years for it.
What the Government has done is to scrap the $7000 grant, which allowed first home buyers the choice to either buy a new or an established property.
This has been replaced by a giant for $10,000 but this money can only be used to buy new homes.
Unfortunately, this limits first home buyers using the grant to move to outlying suburbs, and not everyone starting out wants that.
If you choose to live way out in newly developing estates where supporting infrastructure can take years to eventuate, you have to question what you really are getting for your money.
So what do we expect in the market?
After a nice break above 5100 points in March, as at the time of writing this week the market was again trading back above this level.
Remember, this is a critical point, historically being just above important prior highs of 5048.6 points in April, 2010, and 5069.5 points in April, 2011, after which the market had falls of 17 and 24.4 per cent respectively.
The difference between now and then is the way the market unfolded in the lead-up to the prior falls.
We saw then a much higher level of volatility while, in recent months, the market has moved into a nice uptrend and been more orderly, despite the resources sector weighing on sentiment.
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