Australian Prime Minister Kevin Rudd has confirmed that the government won't extend a temporary hike to federal grants for first-time home buyers beyond the middle of 2009, despite signs the measure has led to an uptick in housing activity.
The decision withdraws a key lifeline underpinning new housing development in
However, the higher grants have come under fire from some analysts who warn they are artificially inflating house prices, particularly at the lower end of the market, creating a potential time bomb for
Rudd said the grants have served their purpose - insulating the local housing sector at a time of particularly soft housing data globally at the end of last year. "Deadlines are imposed for a particular purpose. (The grant) has had strong, useful results so far. But I've got to say all good things must come to an end," Rudd said.