Did you see the Victorian government increased its first homeowners grant to $20K for regional buyers? Interesting! They also released over the weekend a waving of stamp duty for first home owners for properties under $600K which fazes out between $600-$750K. However as in the past, developers will just lift prices due to the extra demand. With the government telegraphing the changes, its very likely you will see developers lift the prices straight away for new properties. As always the price rises will be greater than the value of the grants, this always happens. This is simply because buyers now have an extra $20k which the banks will allow them to leverage against – that is if a 20% deposit is required, first home buyers can borrow another $80k + $20k, their new deposit, giving them in simple terms another $100,000 to spend. And this fat allows the developer to 150
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