photo credit: Just a Temporary Measure
Australia’s disastrous first home owners grant has spread in principle to both the US with an $8000 tax credit (rumoured to soon be ‘boosted’ to $15,000) and now to our Pacific cousins in Fiji with a handout.
Sure the American’s are giving a tax credit, ensuring that only those with enough savings can get into the property game, but have a read of this:
Experts Commend Fiji Government’s New Housing Plan
Suva, Fiji (AHN) – The Fiji Government’s initiative to put in place a housing assistance grant worth $10 million for the construction of new individual homes was applauded by economics and business experts.
According to the Prime Minister Commodore Voreqe Bainimarama, this housing assistance grant shall be available to those families or individuals who want to construct their first house and who meet the commercial bank loan serviceability requirements can substantially contribute towards the 20 percent deposit requirement but do not have enough funds to meet the total deposit requirements.
Each successful applicant will be given a maximum of $10,000 and that would mean that 1,000 families can benefit from this scheme, he said.
“Based on an average cost of $100,000 for a basic house, this grant scheme has the potential to generate $100 million into the economy,” Bainimarama said.
As we have repeated time and again, if everyone gets $10,000, then the price of land will go up at least $10,000. This is a subsidy for the sellers, not the buyers.
Let’s hope that not too many of Bainimarama’s family are in the real estate industry.
Read the frustrations of local blogger Fiji Freedom Fighter re under-utilised land and poor NGO policy. If only more NGO’s understood economics and the effect of any community improvements on the value of land. Ditto for our politicians and their well-heeled consultants.
Who are we really working for?