First home buyer grants would be judged a mistake if those taking them out subsequently lost their jobs and defaulted on the loans, the opposition says.


Shadow treasurer Joe Hockey said there was also legitimate concern that the grants might be pushing up the price of housing.

He said there was need for caution as the government and everyone else was predicting a rise in unemployment of up to 300,000 people.

“I would hate to see that those people being encouraged to go out and buy their first homes and are going to end up unemployed in the next 12-18 months,” he told ABC Radio.

“It might be great to stimulate and distort one part of the economy.

“But if it means that those poor buggers are going to end up unemployed and default on their home loan in 12 or 18 months time through no fault of their own, then this will be seen to be a mistake.”

New Limited reported today that the federal government was considering extending its enhanced first home-buyers grant beyond June 30.

The grants scheme could be revised in the May 12 federal budget to favour new home construction over purchases of existing homes, they said.

The scheme was a $1.5 billion inclusion in the $10.4 billion economic stimulus package announced in December last year.

The grant to first-time buyers of existing houses was doubled to $14,000, and tripled to $21,000 for those buying new housing stock.

Mr Hockey said all the grants did was increase housing prices unless there was an increase in housing stocks.

“We don\’t know whether there has been a sufficient increase in the amount of housing provided to meet what has stimulated demand,” he said.