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>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy thei

>> Australia tried this with tragic results Australian living in Canada here - unsure what the tragic results were? It’s helped a number of my friends buy their first home - with a small (~$10k) credit /reduced stamp duties and taxes on the first home owned and lived in (ie not an investment). Negative gearing has been far more impactful in increasing the cost of housing, with people buying multiple homes for investment purposes.

domlebo70 4y ago
It artificially drives prices up. This is not a good thing for housing
- eertami 4y ago
  Exactly. Which makes the subsidies a funnelling of taxpayer money into the pockets of landowners - obviously this is not good, but if you have a population of majority landowners, then this is a sure-fire way to get votes.
  - imtringued 4y ago
    If there are 9 homes and 10 people, the 9th guy is going to bid everything he has, including government subsidies so he doesn't end up as the 10th guy who gets nothing. Those subsidies only work if there are 10 houses and 9 people because then you can choose whatever house you want and sellers must compete with lower and lower prices.
NamTaf 4y ago
It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by total prices because now FHB B can bid [x] higher and will. I agree that negative gearing is far more impactful, but I certainly don’t believe my FHB grant helped me enter the market. It just meant I paid that much more to a seller for the same thing.
- DangitBobby 4y ago
  Not everyone is a first time homebuyer though. Why would the market bear that price bump?
  - OJFord 4y ago
    Not every house in the market is going to be a first home either though; especially when such incentives are often limited to a certain (the lower end) range.
- car_analogy 4y ago
  > In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity That's the wonderful part about lending - it's an arms race, where the lender always wins.
  - gbasin 4y ago
    Until there's mass defaults
    - gruez 4y ago
      That's when you have the government bail them out :)
      - BizarroLand 4y ago
        And then the people who profited in the interim buy up all of the cheap surplus, sit on it for a few years and then trickle it back out as the prices return to normal, making massive returns on their investment, profiting off of the misery they created in the first place. And you can't even be mad at them for it because there's no collusion, no intent to manufacture the disaster, no single person responsible for it all, this is just the consequence of economic torture by a hundred thousand cuts. Their hands are clean even though the damage is still done.
Grimburger 4y ago
Would you say it's easier or harder to buy your first home after 20+ years of all these first home owner policies? Find it hard to believe anyone could say such a thing with a straight face. Every time these subsidies are announced the median price rises. Negative gearing is a distraction that completely skirts the real issues regarding supply, density and infrastructure.

domlebo70 4y ago

It artificially drives prices up. This is not a good thing for housing

eertami 4y ago
Exactly. Which makes the subsidies a funnelling of taxpayer money into the pockets of landowners - obviously this is not good, but if you have a population of majority landowners, then this is a sure-fire way to get votes.
- imtringued 4y ago
  If there are 9 homes and 10 people, the 9th guy is going to bid everything he has, including government subsidies so he doesn't end up as the 10th guy who gets nothing. Those subsidies only work if there are 10 houses and 9 people because then you can choose whatever house you want and sellers must compete with lower and lower prices.

NamTaf 4y ago

It’s largely understood (I am in a pub halfway across the world and have no specific citation) that the FHBG just bumped the purchase price up by that amount. In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity (in that, few limit themselves to less), and many FHBs are competing against each other for a similar cross-section of the market, so grants are easily absorbed by total prices because now FHB B can bid [x] higher and will. I agree that negative gearing is far more impactful, but I certainly don’t believe my FHB grant helped me enter the market. It just meant I paid that much more to a seller for the same thing.

DangitBobby 4y ago
Not everyone is a first time homebuyer though. Why would the market bear that price bump?
- OJFord 4y ago
  Not every house in the market is going to be a first home either though; especially when such incentives are often limited to a certain (the lower end) range.
car_analogy 4y ago
> In Australia, many new buyers’ max purchase prices are dictated by their total borrowing capacity That's the wonderful part about lending - it's an arms race, where the lender always wins.
- gbasin 4y ago
  Until there's mass defaults
  - gruez 4y ago
    That's when you have the government bail them out :)
    - BizarroLand 4y ago
      And then the people who profited in the interim buy up all of the cheap surplus, sit on it for a few years and then trickle it back out as the prices return to normal, making massive returns on their investment, profiting off of the misery they created in the first place. And you can't even be mad at them for it because there's no collusion, no intent to manufacture the disaster, no single person responsible for it all, this is just the consequence of economic torture by a hundred thousand cuts. Their hands are clean even though the damage is still done.

Grimburger 4y ago

Would you say it's easier or harder to buy your first home after 20+ years of all these first home owner policies? Find it hard to believe anyone could say such a thing with a straight face. Every time these subsidies are announced the median price rises. Negative gearing is a distraction that completely skirts the real issues regarding supply, density and infrastructure.