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Home owner grant extensions welcomed by industry

By Drew Cratchley
12 May 2009 9:45 PM

SYDNEY, May 12 AAP - The construction sector and real estate industry have welcomed measures to extend the federal government's extra first home buyer grants.

Since October 2009, first home buyers have received an extra $7,000 when purchasing an established home and an extra $14,000 for new homes, on top of the $7,000 provided under the first home owners scheme.

The boosted grants were due to end on June 30 but will now apply for homes purchased on or before September 30 this year.

The extra grants will then be phased down to an additional $3,500 for established homes and $7,000 for new homes up to December 31, 2009.

After that date the $7,000 first home owners scheme continues in its original form.

"This extension will continue to stimulate housing activity, support the construction industry and assist first home buyers to enter the housing market," the government said.

Housing and real estate groups had lobbied for an extension to the grants and welcomed the measures included in the budget.

The Housing Industry of Australia said the extension would secure jobs.

"The housing industry has been ravaged by the global financial crisis and the budget decision to continue the boosted first home owners grant means thousands of jobs will be secure and frenetic buying will be avoided," it said.

Independent mortgage broker Loan Market Group said the government's extension of the grant would provide some certainty for first home buyers, the residential real estate sector and housing industry.

"The real estate market was at risk of a downturn if the boosted grant was allowed to expire as scheduled on June 30," Loan Market Group executive director John Kolenda said.

"It's welcome news that the government has heeded persistent calls from Loan Market Group and other organisations to extend the scheme.

"It shows that they are carefully considering the state of the property market."