FHOG is Subprime-like

Karl FitzgeraldCommentary1 Comment

speculators1

Commonwealth bank CEO Ralph Norris made some sensible comments about the first home owners grant, note particularly the second paragraph on the FHOG enabling the same risky lending as the sub prime lending practices in the US.

“The first home buyers grant has provided a stimulus to this point, but we have to be careful that this doesn’t become a situation where this is an open-ended offer,” Mr Norris said.

He noted the subprime lending woes in the US had largely come about because people who could not afford to borrow were encouraged to.

“All of us have to make sure we’re lending responsibly to first home buyers,” he said.

Please read this piece on the risky nature of the FHOG (that started this line of thinking), the speculative storm brewing and also the following warning – RENT DON’T BUY!

One Comment on “FHOG is Subprime-like”

  1. I’m starting to find the level of spin in the press so abhorrent. Especially when I hear my friends still talking about wanting to buy a home. Our generation has been ripped off enough and now they want us to mortgage ourselves to the hilt to help subsidise their dodgy speculation.

    What’s even worse is the government helping them do it.

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