Fed: Building industry to lobby govt to extend homeowners grant

AAP General News (Australia)
08-08-2001
Fed: Building industry to lobby govt to extend homeowners grant

CANBERRA, Aug 8 AAP - A surge in lending for new home construction showed the $14,000
grant for first homeowners should be extended beyond this year, the building industry
said today.

Finance for the construction of new homes soared 17.4 per cent in June to 6,594 dwellings,
the Australian Bureau of Statistics said today, building on last month's 21.7 per cent
surge.

But Master Builders Australia (MBA) said the sharp rise in new home building would
lead to a period of turbulence next year.

"The current housing recovery is driven by the combined effect of the doubling of the
First Home Owners Grant and the interest rate cuts earlier this year," MBA chief economist
Wilhelm Harnisch said.

"The 31 December 2001 cut-off date for the $14,000 grant is bunching demand and fuelling
the current recovery.

"This can only lead to a bust situation and a period of turbulence and uncertainty
once the grant finishes."

Mr Harnisch said MBA would meet Prime Minister John Howard today and Treasurer Peter
Costello tomorrow to try to have the grant extended.

In an effort to kick-start the deteriorating housing industry in March, the government
doubled the existing $7,000 grant for first homebuyers if they signed a contract to buy
or build a new home this year.

AAP jph/daw/las/bwl

KEYWORD: HOUSING MBA

2001 AAP Information Services Pty Limited (AAP) or its Licensors.