People love something for nothing. And they hate missing out on it.
The astonishing roller-coaster in the housing industry is a good example of it. And, according to figures issued this week, the roller-coaster continued. Indeed, the Australian term Big Dipper might be more appropriate.
The Big Dipper has been caused by Governments messing around with the market, in particular with the First Home Owner Grant to a lesser extent by the pernicious levels of stamp duty.
The scheme was introduced on July 1, 2000. Under it, every first-time purchaser of a dwelling got $7000 cash. The theory was to compensate them for the introduction of the GST.
The scheme was flawed from the start. Dwellings were exempt from the GST, so there was no need for the grant to apply across the board. There might have been an argument for a grant to people constructing new dwellings because the GST was to apply to the labour and materials in construction, whereas the wholesale sales tax it replaced applied only to some of the materials.
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